<PAGE>

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2007

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______________ TO ______________

                         COMMISSION FILE NUMBER: 0-49648

                          CONTINAN COMMUNICATIONS, INC.
                          -----------------------------
               (Exact Name of Company as Specified in its Charter)

               Nevada                                       73-1554122
  -------------------------------                       -------------------
  (State or Other Jurisdiction of                        (I.R.S. Employer
   Incorporation or Organization)                       Identification No.)

         4640 Admiralty Way, Suite 500, Marina del Rey, California 90292
         ---------------------------------------------------------------
                    (Address of Principal Executive Offices)

                                 (310) 496-5747
                                 --------------
                          (Company's Telephone Number)

              -----------------------------------------------------
              (Former Name, Former Address, and Former Fiscal Year,
                          if Changed Since Last Report)

       Indicate by check mark whether the Company (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the Company
was required to file such reports), and (2) been subject to such filing
requirements for the past 90 days. Yes [X] No [ ].

       Indicate by check mark whether the Company is a shell company (as defined
in Rule 12b-2 of the Exchange Act): Yes [ ] No [X].

       As of July 31, 2007, the Company had 29,667,539 shares of common stock
issued and outstanding.

       Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]


                                       1
<PAGE>

                                TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION                                              PAGE

   ITEM 1.  FINANCIAL STATEMENTS (UNAUDITED)

            CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 2007.....................3

            CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE
            AND SIX MONTHS ENDED JUNE 30, 2007 AND JUNE 30, 2006,
            AND FOR THE PERIOD OF INCEPTION (SEPTEMBER 16, 2002)
            TO JUNE 30, 2007...................................................4

            CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY FOR THE
            PERIOD OF INCEPTION (SEPTEMBER 16, 2002) TO JUNE 30, 2007..........5

            CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS
            ENDED JUNE 30, 2007 AND JUNE 30, 2006, AND FOR THE PERIOD
            OF INCEPTION (SEPTEMBER 16, 2002) TO JUNE 30, 2007.................6

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.........................7

   ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
            AND RESULTS OF OPERATIONS.........................................28

   ITEM 3.  CONTROLS AND PROCEDURES...........................................42

PART II - OTHER INFORMATION

   ITEM 1.  LEGAL PROCEEDINGS.................................................43

   ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.......43

   ITEM 3.  DEFAULTS UPON SENIOR SECURITIES...................................43

   ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...............43

   ITEM 5.  OTHER INFORMATION.................................................43

   ITEM 6.  EXHIBITS..........................................................43

SIGNATURES...................................................................44


                                       2
<PAGE>
<TABLE>
<S>                                                                          <C>
PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCAL STATEMENTS.

                          CONTINAN COMMUNICATIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                           CONSOLIDATED BALANCE SHEET
                                  JUNE 30, 2007
                                   (UNAUDITED)


ASSETS

Current assets:
    Cash
    Other receivables                                           $         7,083
    Prepaid expense
                                                                ----------------
        Total current assets                                              7,083

Furniture and Equipment, net                                             30,922

Other Assets:
    Intangible assets, net                                               57,751
    Developed software, net                                             500,815
    Security deposit                                                      4,100
                                                                ----------------
        Total other assets                                              562,666
                                                                ----------------

              Total assets                                      $       600,671
                                                                ================

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
    Accounts payable                                            $       259,343
    Accrued liabilities                                                  78,078
    Accrued interest on notes payable - related party                    59,808
    Accrued interest on notes payable                                    36,650
    Accrued management fees                                             226,910
    Current portion of capital leases                                     4,666
    Notes payable - related party                                       207,553
    Notes payable                                                       407,586
    Income tax payable                                                      800
    Liability for derivative instruments                                    579
                                                                ----------------
        Total current liabilities                                     1,281,973

Long term liabilities:
    Capital leases, net of current portion                                3,355

Stockholders' deficit:
    Preferred stock, par value of $0.001; 10,000,000
      shares authorized 5,660 issued and outstanding                          6
    Common stock; par value of $0.001; 100,000,000
      shares authorized 27,564,172 issued and outstanding                27,565
    Additional paid in capital                                        6,616,135
    Deficit accumulated during the development stage                 (7,328,363)
                                                                ----------------
       Total stockholders' deficit                                     (684,657)
                                                                ----------------

             Total liabilities and stockholders' deficit        $       600,671
                                                                ================


           See Accompanying Notes to Consolidated Financial Statements

                                       3
<PAGE>

                                                    CONTINAN COMMUNICATIONS, INC.
                                                    (A DEVELOPMENT STAGE COMPANY)
                                                CONSOLIDATED STATEMENTS OF OPERATIONS
                                                             (UNAUDITED)


                                                                                                                      PERIOD FROM
                                                     FOR THE THREE MONTHS              FOR THE SIX MONTHS              SEPTEMBER
                                                         ENDED JUNE 30,                    ENDED JUNE 30,               16, 2002
                                                ------------------------------    ------------------------------    (INCEPTION) TO
                                                     2007            2006              2007            2006          JUNE 30, 2007
                                                --------------  --------------    --------------  --------------    ---------------

Revenues                                        $         800   $       8,034     $       2,042   $      35,485     $      131,912

Expenses:
  Direct costs                                         13,034          77,158            14,246         151,503            383,603
  Selling expenses                                     48,290          29,502            59,823          92,263          1,709,934
  Depreciation and amortization                        16,878          13,489            33,598          29,777            173,709
  General and administrative expenses                 274,627         360,900           537,235         579,152          4,108,778
                                                --------------  --------------    --------------  --------------    ---------------
    Total expenses                                    352,829         481,049           644,902         852,695          6,376,024

Other income (expenses), net:
  Interest expense                                    (16,514)        (27,404)          (32,382)        (34,997)          (239,110)
  Other expense                                            --            (543)             (411)           (543)              (954)
  Gain (loss) on derivative instruments                 1,572              --             1,572              --           (840,249)
  Other income                                                                                                                  62
                                                --------------  --------------    --------------  --------------    ---------------
    Total other income (expenses), net                (14,942)        (27,947)          (31,221)        (35,540)        (1,080,251)
                                                --------------  --------------    --------------  --------------    ---------------

Loss before provision for income taxes               (366,971)       (500,962)         (674,081)       (852,750)        (7,324,363)

Provision for income taxes                                                                  800             800              4,000
                                                --------------  --------------    --------------  --------------    ---------------

Net Loss                                        $    (366,971)  $    (500,962)    $    (674,881)  $    (853,550)    $   (7,328,363)
                                                ==============  ==============    ==============  ==============    ===============

Net loss per common share - basic and
  diluted                                       $       (0.01)  $       (0.02)    $       (0.03)  $       (0.08)    $        (0.29)
                                                ==============  ==============    ==============  ==============    ===============

Basic and diluted weighted average common
  shares outstanding (1)                           25,912,978      22,488,701        25,912,978      11,244,350         25,692,926
                                                ==============  ==============    ==============  ==============    ===============

(1) Adjusted for a 1 for 20 reverse split effective on December 1, 2006.


                                     See Accompanying Notes to Consolidated Financial Statements

                                                                 4
<PAGE>

                                                    CONTINAN COMMUNICATIONS, INC.
                                                    (A DEVELOPMENT STAGE COMPANY)
                                           CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                 FOR THE PERIOD FROM SEPTEMBER 16, 2002 (INCEPTION) TO JUNE 30, 2007
                                                             (UNAUDITED)


                                                                                                            DEFICIT
                                                                                                          ACCUMULATED
                                                                                             ADDITIONAL    DURING THE      TOTAL
                                              PREFERRED STOCK           COMMON STOCK          PAID IN     DEVELOPMENT  STOCKHOLDERS'
                                          ----------------------  ------------------------    CAPITAL        STAGE         EQUITY
                                            SHARES      AMOUNT       SHARES       AMOUNT     (RESTATED)    (RESTATED)     (DEFICIT)
                                          ----------- ----------  ------------  ----------  ------------  ------------ -------------

Balance at inception (September 16, 2002)         --  $      --            --   $      --   $        --   $        --  $         --
  Issuance of common stock                 3,000,000      3,000            --          --            --            --         3,000
Balance at December 31, 2002               3,000,000      3,000            --          --     2,123,608            --     2,126,608
  Net loss                                        --         --            --          --            --      (167,276)     (167,276)
Balance at December 31, 2003               3,000,000      3,000            --          --            --      (167,276)    1,959,332
  Net loss                                        --         --            --          --            --      (791,049)     (791,049)
Balance at December 31, 2004               3,000,000      3,000            --          --     2,123,608      (958,325)    1,168,283
  Net loss                                        --         --            --          --            --    (1,359,128)   (1,359,128)
                                          ----------- ----------  ------------  ----------  ------------  ------------ -------------
Balance at December 31, 2005               3,000,000      3,000            --          --     2,123,608    (2,317,453)     (190,845)
  Reverse acquisition, May 2006                   --         --   1,699,108 (1)     1,699       971,820            --       973,519
  Stock options granted for consulting
    services                                      --         --            --          --        40,343            --        40,343
  Stock options granted to employees              --         --            --          --        33,619            --        33,619
  Stock options granted to management             --         --            --          --        58,273            --        58,273
  Stock options granted for finders fees          --         --            --          --        37,737            --        37,737
  Fees on reverse acquisition                     --         --            --          --       (37,737)           --       (37,737)
  Issue of common stock upon exercise of
    warrants                                      --         --       290,000         290          (290)           --            --
  Issue of common stock for consulting
    service                                       --         --       249,500         250       548,750            --       549,000
  Conversion of preferred stock to
    common stock                          (3,000,000)    (3,000)   20,250,000      20,250       (17,250)           --            --
  Conversion of notes payable to common
    stock - Rackgear Inc.                         --         --       210,914         211        63,063            --        63,274
  Conversion of accounts payable in the
    amount of $12,698 to common stock             --         --        22,650          23        12,675            --        12,698
  Conversion of notes payable to
    Preferred stock - First Bridge Bank        5,510          6            --          --       550,951            --       550,957
  Conversion of notes payable to common
    stock - Kurt Hiete                            --         --       200,000         200        60,326            --        60,526
  Conversion of accounts payable in the
    amount of $34,865 to common stock             --         --        35,000          35        34,830            --        34,865
  Issue of common stock for consulting
    services                                      --         --     2,710,000       2,710     1,623,290            --     1,626,000
  Stock options granted for consulting
    services                                      --         --            --          --        48,846            --        48,846
  Stock options granted for consulting
    services                                      --         --            --          --       215,748            --       215,748
  Stock options granted to employees              --         --            --          --        93,236            --        93,236
  Transfer to derivative liability                --         --            --          --      (307,516)           --      (307,516)
  Net loss                                        --         --            --          --            --    (4,336,029)   (4,336,029)
                                          ----------- ----------  ------------  ----------  ------------  ------------ -------------
Balance at December 31, 2006                   5,510          6    25,667,172      25,668     6,154,322    (6,653,482)     (473,486)
  Issuance of common stock for
    consulting services                           --         --        65,000          65        33,085            --        33,150
  Conversion of note payable to
    preferred stock - First Bridge
    Capital                                      150         --            --          --        15,000            --        15,000
  Stock options granted for consulting
    services                                      --         --            --          --        81,130            --        81,130
  Conversion of A/P and management fees
    in the amount of $334,430 to common
    stock                                         --         --     1,832,000       1,832       332,598            --       334,430
  Net loss                                        --         --            --          --            --      (674,881)     (674,881)
                                          ----------- ----------  ------------  ----------  ------------  ------------ -------------
Balance at June 30, 2007                       5,660  $       6    27,564,172   $  27,565   $ 6,616,135   $(7,328,363) $   (684,657)
                                          =========== ==========  ============  ==========  ============  ============ =============

(1) Adjusted for a 1 for 20 reverse split effective on December 1, 2006.


                                     See Accompanying Notes to Consolidated Financial Statements

                                                                 5
<PAGE>

                                                    CONTINAN COMMUNICATIONS, INC.
                                                    (A DEVELOPMENT STAGE COMPANY)
                                                CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                             (UNAUDITED)


                                                                                                                    PERIOD FROM
                                                                               FOR THE SIX       FOR THE SIX     SEPTEMBER 16, 2002
                                                                               MONTHS ENDED      MONTHS ENDED      (INCEPTION) TO
                                                                              JUNE 30, 2007     JUNE 30, 2006       JUNE 30, 2007
                                                                             ---------------   ---------------   ------------------
Cash flows from operating activities:
  Net loss                                                                   $     (674,881)   $     (853,550)   $      (7,328,363)
  Adjustments to reconcile net loss to net cash
    used in operating activities:
  Depreciation and amortization                                                      33,598            29,777              173,708
  Stock compensation for consulting services and
    options granted to management and employees                                     114,280            51,400            3,114,329
  (Gain) loss on derivative instruments                                              (1,572)               --                  579
  (Increase) decrease in assets:
        Accounts receivable                                                              --            38,152                   --
        Other receivables                                                             1,758                --                   --
        Security deposit                                                              4,300                --               (4,100)
        Prepaid expenses                                                                500                --                   --
  Increase (decrease) in liabilities:
        Accounts payable                                                             39,152           175,799              512,738
        Accrued liabilities                                                           8,983             6,510              102,570
        Accrued interest on notes payable - related party                             5,560             7,803               56,866
        Accrued interest on notes payable                                            16,970            12,241               39,592
        Accrued management fees                                                      98,213            32,692              300,694
        Income tax payable                                                              800                --                  800
                                                                             ---------------   ---------------   ------------------
              Net cash used in operating activities                                (352,339)         (499,176)          (3,030,587)

Cash flows from investing activities:
  Payment for intangible assets                                                          --              (154)            (101,369)
  Payment for software development costs                                                 --            (5,300)            (411,567)
  Purchase of equipment                                                              (3,804)               --              (25,167)
                                                                             ---------------   ---------------   ------------------
              Net cash used in investing activities                                  (3,804)           (5,454)            (538,103)

Cash flows from financing activities:
  Sale of common stock                                                                   --           214,500              247,500
  Borrowings on convertible note payable                                             15,000                --               15,000
  Payments on note payable-related party                                               (849)               --               (7,677)
  Payments on notes payable                                                              --                --               (7,400)
  Borrowings on notes payable - related party                                        22,766            65,910            2,669,189
  Borrowings on notes payable                                                       320,000           218,500              680,986
  Payments on capital lease obligations                                              (2,401)           (5,938)             (21,825)
                                                                             ---------------   ---------------   ------------------
  Net cash provided by financing activities                                         354,516           492,972            3,575,773

Increase (decrease) in cash                                                          (1,627)          (11,658)               7,083

Cash, beginning of the period                                                         8,710            25,753                   --
                                                                             ---------------   ---------------   ------------------
Cash, end of the period                                                      $        7,083    $       14,095    $           7,083
                                                                             ===============   ===============   ==================

Supplemental disclosures of cash flow information:
     Interest paid                                                           $           --    $           --    $              --
                                                                             ===============   ===============   ==================
     Income taxes paid                                                       $           --    $          800    $           3,200
                                                                             ===============   ===============   ==================

Supplemental disclosures of non cash investing and financing activities:
     Furniture and equipment acquired through exchange of stock              $           --    $           --    $          30,250
                                                                             ===============   ===============   ==================
     Developed software acquired through exchange of stock                   $           --    $           --    $         165,000
                                                                             ===============   ===============   ==================
     Conversion of note payable to preferred stock                           $       15,000    $           --    $         565,957
                                                                             ===============   ===============   ==================
     Conversion of notes payable and accrued interest into common stock      $           --    $           --    $         123,800
                                                                             ===============   ===============   ==================
     Conversion of A/P and management fees into common stock                 $      334,430    $           --    $         381,993
                                                                             ===============   ===============   ==================
     Purchase of equipment through capital leases                            $           --    $           --    $          29,843
                                                                             ===============   ===============   ==================
     Issuance of stock options for consulting services                       $       81,130    $       40,000    $         386,067
                                                                             ===============   ===============   ==================
     Issuance of common stock for consulting services                        $       33,150    $           --    $       2,208,150
                                                                             ===============   ===============   ==================
     Stock options granted to management and employees                       $           --    $       11,400    $         185,128
                                                                             ===============   ===============   ==================
     Issue of common stock upon exercise of warrants                         $           --    $          290    $             290
                                                                             ===============   ===============   ==================


                                     See Accompanying Notes to Consolidated Financial Statements

                                                                  6
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<PAGE>

                          CONTINAN COMMUNICATIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1 - ORGANIZATION

Texxon, Inc. ("Texxon") was incorporated on October 6, 1998, under the laws of
the State of Oklahoma. Since inception, the Company's primary focus was raising
capital and paying for the exclusive licenses. Pursuant to the Company's Share
Agreement with TelePlus, Inc., a California corporation ("TelePlus"), the
Company's focus is now centered on the development and marketing of wireless
networks and specific services for international travelers.

In May 2006, Texxon and the stockholders of TelePlus completed a Share Exchange
Agreement whereas the Company acquired all of the outstanding capital stock of
TelePlus from the TelePlus stockholders in exchange for 3,000,000 shares of
voting convertible preferred stock convertible into 81,000,000 shares of Company
common stock. This transaction constituted a change of control of the Company
whereby the majority of the shares of Texxon are now owed by the stockholders of
TelePlus. The accounting for this transaction is identical to that resulting
from a reverse-acquisition, except that no goodwill or other intangible assets
is recorded. As a result, the transaction was treated for accounting purposes as
a recapitalization by the accounting acquirer TelePlus. The historical financial
statements will be those of TelePlus. On November 22, 2006, Texxon, the Oklahoma
corporation, for the sole purpose of re-domestication in Nevada, filed Articles
of Merger with the Secretaries of state of the states of Oklahoma and Nevada
pursuant to which Texxon, the Oklahoma corporation, was merged with and into
Texxon, Inc., a Nevada corporation, with the Nevada corporation remaining as the
surviving entity. Immediately following the merger, the Nevada company changed
its name to Continan Communications, Inc. ("Company") and its articles of
incorporation were amended such that the number of common stock and preferred
stock is increased from 45,000,000 to 100,000,000 and from 5,000,000 to
10,000,000, respectively. On December 1, 2006, the Company executed a 1 for 20
reverse stock split of all its issued and outstanding shares of common stock.
Additionally, all convertible preferred stocks were converted into 20,250,000
shares of common stock.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION.

As a result of the Share Exchange Agreement, the Company acquired 100% of the
stock of TelePlus, Inc. and TelePlus has become a wholly owned subsidiary of the
Company. The consolidated financial statements include the accounts of the
parent and its subsidiary. All significant intercompany transactions have been
eliminated in the consolidation. TelePlus was incorporated in the State of
California on September 16, 2002.

The Company is in the development stage, as defined in Statement of Financial
Accounting Standards ("SFAS") No. 7, "Accounting and Reporting by Development
Stage Enterprises", with its principal activity being to leverage its
proprietary content management software to deliver life enhancing, language
specific, contents and services via a cellular phone.

                                       7
<PAGE>

CASH AND CASH EQUIVALENTS.

The Company defines cash and cash equivalents as short-term investments in
highly liquid debt instruments with original maturities of three months or less,
which are readily convertible to known amounts of cash.

USE OF ESTIMATES.

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

FINANCIAL INSTRUMENTS.

Financial accounting standards require disclosure of the fair value of financial
instruments held by the Company. Fair value of financial instruments is
considered the amount at which the instrument could be exchanged in a current
transaction between willing parties. The carrying amount of receivables,
accounts payable, and other liabilities included on the accompanying balance
sheet approximate their fair value due to their short-term nature.

FURNITURE AND EQUIPMENT.

Furniture and equipment are carried at cost and depreciation is computed over
the estimated useful lives of the individual assets ranging from 3 to 15 years.
The Company uses the straight-line method of depreciation.

The related cost and accumulated depreciation of assets retired or otherwise
disposed of are removed from the accounts and the resultant gain or loss is
reflected in earnings. Maintenance and repairs are expensed currently while
major renewals and betterments are capitalized.

INTANGIBLE ASSETS.

Intangible assets consist of patent application costs that relate to the
Company's U.S. patent application and consist primarily of legal fees, the
underlying test market studies and other direct fees. The recoverability of the
patent application costs is dependent upon, among other factors, the success of
the underlying technology.

DEVELOPED SOFTWARE.

Developed software is carried at the cost of development and amortization is
computed over the estimated useful life of the software that is currently 15
years. The Company uses the straight-line method of amortization.

                                       8
<PAGE>

IMPAIRMENT OF LONG-TERM ASSETS.

Long-term assets of the Company are reviewed annually as to whether their
carrying value has become impaired. Management considers assets to be impaired
if the carrying value exceeds the future projected cash flows from related
operations. Management also re-evaluates the periods of amortization to
determine whether subsequent events and circumstances warrant revised estimates
of useful lives. As of June 30, 2007 management expects these assets to be fully
recoverable.

INCOME TAXES.

Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets, including tax loss and credit carryforwards, and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date. Deferred income tax expense represents the change during the
period in the deferred tax assets and deferred tax liabilities. The components
of the deferred tax assets and liabilities are individually classified as
current and non-current based on their characteristics. Deferred tax assets are
reduced by a valuation allowance when, in the opinion of management, it is more
likely than not that some portion or all of the deferred tax assets will not be
realized.

REVENUE RECOGNITION.

The Company recognizes revenues: (i) for the wholesale product sold by the
Company to international wireless providers, when its proprietary software
confirms that the user of its services has been billed by the international
wireless providers; (ii) for the "Travel Kit" distributed through strategic
travel industry related distribution channels; and (iii) for the sale of the SIM
cards to retailers, when the credit card of the user has been debited for usage
or for access to Company provided interpretation and/or assistance services.

CAPITAL LEASES.

Assets held under capital leases are recorded at the lower of the net present
value of the minimum lease payments or the fair value of the leased asset at the
inception of the lease. Amortization expense is computed using the straight-line
method over the shorter of the estimated useful lives of the assets or the
period of the related lease.

STOCK BASED COMPENSATION.

The Company adopted SFAS No. 123 (Revised 2004), Share Based Payment ("SFAS No.
123R"). SFAS No. 123R requires companies to measure and recognize the cost of
employee services received in exchange for an award of equity instruments based
on the grant-date fair value. SFAS No. 123R eliminates the ability to account
for the award of these instruments under the intrinsic value method prescribed
by Accounting Principles Board ("APB") Opinion No. 25, Accounting for Stock
Issued to Employees, and allowed under the original provisions of SFAS No. 123.

                                       9
<PAGE>

EARNINGS PER SHARE.

SFAS No. 128, "Earnings Per Share," requires presentation of basic earnings per
share ("Basic EPS") and diluted earnings per share ("Diluted EPS"). The
computation of basic earnings per share is computed by dividing income available
to common stockholders by the weighted-average number of outstanding common
shares during the period. Diluted earnings per share gives effect to all
dilutive potential common shares outstanding during the period. The computation
of diluted earnings per share does not assume conversion, exercise or contingent
exercise of securities that would have an anti-dilutive effect on losses. As all
dilutive securities have an antidilutive effect on 2007 and 2006 earnings per
share, the securities have been excluded from the earnings per share
calculation.

ACCOUNTING FOR OPTIONS AND WARRANTS.

During the period ended December 31, 2006, the Company issued warrants and
options to numerous consultants and investors for services and to raise capital.
During the period up until the recapitalization performed on December 1, 2006
(Note 1), the Company did not have sufficient authorized shares in order to
issue these options should they be exercised. Because of the lack of authorized
shares, the Company therefore needed to follow derivative accounting rules for
its accounting of options and warrants.

The Company accounted for options and warrants issued in connection with
financing arrangements in accordance with Emerging Issues Task Force ("EITF")
Issue No. 00-19, "Accounting for Derivative Financial Instruments Indexed to,
and Potentially Settled in, a Company's Own Stock." Pursuant to EITF 00-19, the
Company was to recognize a liability for derivative instruments on the balance
sheet to reflect the insufficient amounts of shares authorized, which would have
otherwise been classified into equity. An evaluation of specifically identified
conditions was then made to determine whether the fair value of warrants or
options issued was required to be classified as a derivative liability. The fair
value of warrants and options classified as derivative liabilities was adjusted
for changes in fair value at each reporting period, and the corresponding
non-cash gain or loss was recorded in the corresponding period earnings.

In December 2006, the Company completed a reincorporation by merger with
Texxon-Nevada, which, therefore, allowed the Company to increase its authorized
preferred and common shares from 5,000,000 to 10,000,000 shares and from
45,000,000 to 100,000,000 shares, respectively.

At the date of reincorporation, the Company recalculated the value of its
options and warrants at the current fair value, and recorded an increase to
equity and a decrease to derivative liabilities for the fair value of the
options and warrants. The difference between the liability and the recalculated
fair value was recorded as a gain or loss.

                                       10
<PAGE>

RECENT ACCOUNTING PRONOUNCEMENTS.

In February 2007, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 159, "The Fair Value Option for Financial Assets and Financial
Liabilities-Including an amendment of FASB Statement No. 115." SFAS No. 159
permits companies to choose to measure many financial instruments and certain
other items at fair value that are not currently required to be measured at fair
value. The objective of SFAS No. 159 is to provide opportunities to mitigate
volatility in reported earnings caused by measuring related assets and
liabilities differently without having to apply hedge accounting provisions.
SFAS No. 159 also establishes presentation and disclosure requirements designed
to facilitate comparisons between companies that choose different measurement
attributes for similar types of assets and liabilities. SFAS No. 159 will be
effective in the first quarter of fiscal 2008. The Company is currently
evaluating the impact that this statement will have on its financial statements.

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements,"
which addresses the measurement of fair value by companies when they are
required to use a fair value measure for recognition or disclosure purposes
under GAAP. SFAS No. 157 provides a common definition of fair value to be used
throughout GAAP that is intended to make the measurement of fair value more
consistent and comparable and improve disclosures about those measures. SFAS No.
157 will be effective for an entity's financial statements issued for fiscal
years beginning after November 15, 2007. The Company is currently evaluating the
effect SFAS No. 157 will have on its consolidated financial position, liquidity,
or results of operations.

In July 2006, the FASB issued FASB Interpretation ("FIN") No. 48, "Accounting
for Uncertainty in Income Taxes - an Interpretation of FASB Statement No. 109".
FIN No. 48 clarifies the accounting for uncertainty in income taxes recognized
in a company's financial statements in accordance with SFAS No. 109, "Accounting
for Income Taxes". FIN No. 48 prescribes a recognition threshold and measurement
attribute for the financial statement recognition and measurement of a tax
position taken or expected to be taken in a tax return. FIN No. 48 also provides
guidance on derecognition, classification, interest and penalties, accounting in
interim periods, disclosure and transition. The requirements of FIN No. 48 are
effective for fiscal year beginning January 1, 2007; the Company does not expect
adoption of this new interpretation to have a material impact on its financial
position, results of operations or cash flows.

In February 2006, the FASB issued SFAS No. 155, "Accounting for Certain Hybrid
Financial Instruments," an amendment of SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities"), and SFAS No. 140, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities".
In this context, a hybrid financial instrument refers to certain derivatives
embedded in other financial instruments. Among other things, SFAS No. 155
permits fair value re-measurement of any hybrid financial instrument that
contains an embedded derivative that otherwise would require bifurcation under
SFAS No. 133. In addition, SFAS No. 155 establishes a requirement to evaluate
interests in securitized financial assets in order to identify interests that
are either freestanding derivatives or "hybrids" which contain an embedded
derivative requiring bifurcation. SFAS No. 155 also clarifies which
interest/principal strips are subject to SFAS No. 133, and provides that
concentrations of credit risk in the form of subordination are not embedded

                                       11
<PAGE>

derivatives. Lastly, SFAS No. 155 amends SFAS No. 140 to eliminate the
prohibition on a qualifying special-purpose entity from holding a derivative
financial instrument that pertains to a beneficial interest other than another
derivative. When SFAS No. 155 is adopted, any difference between the total
carrying amount of the components of a bifurcated hybrid financial instrument
and the fair value of the combined "hybrid" must be recognized as a
cumulative-effect adjustment of beginning deficit/retained earnings. SFAS No.
155 is effective for all financial instruments acquired or issued after the
beginning of an entity's first fiscal year that begins after September 15, 2006.
Earlier adoption is permitted only as of the beginning of a fiscal year,
provided that the entity has not yet issued any annual or interim financial
statements for such year. Restatement of prior periods is prohibited. Management
does not believe this pronouncement will have a significant impact on its future
financial statements.

In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error
Corrections, a replacement of APB Opinion No. 20 and FASB Statement No. 3." SFAS
No. 154 requires retrospective application to prior periods' financial
statements for changes in accounting principle, unless it is impracticable to
determine either the period-specific effects or the cumulative effect of the
change. SFAS No. 154 also requires that retrospective application of a change in
accounting principle be limited to the direct effects of the change. Indirect
effects of a change in accounting principle, such as a change in
non-discretionary profit-sharing payments resulting from an accounting change,
should be recognized in the period of the accounting change. SFAS No. 154 also
requires that a change in depreciation, amortization, or depletion method for
long-lived, non-financial assets be accounted for as a change in accounting
estimate affected by a change in accounting principle. SFAS No. 154 is effective
for accounting changes and corrections of errors made in fiscal years beginning
after December 15, 2005. Early adoption is permitted for accounting changes and
corrections of errors made in fiscal years beginning after the date this
Statement is issued. The adoption of this Statement did not have a material
impact on its financial position, results of operations or cash flows.

RECLASSIFICATIONS

Certain reclassifications have been made to the financial statements for the
three and six months ended June 30, 2006 to conform to the financial statement
presentation for the three and six months ended June 30, 2007. These
reclassifications had no effect on net loss as previously reported.

NOTE 3 - GOING CONCERN

The Company has no significant operating history and, from (inception) to June
30, 2007, has generated a net loss of $7,328,363. The accompanying financial
statements for the period ended June 30, 2007 have been prepared assuming the
Company will continue as a going concern. During fiscal year 2006, management
completed a reverse merger with Texxon and intended to raise equity through a
private placement.

The accompanying financial statements do not include any adjustments to reflect
the possible future effects on the recoverability and classification of assets
or the amounts and classifications of liabilities that may result from the
possible inability of the Company to continue as a going concern.

                                       12
<PAGE>

NOTE 4 - FURNITURE AND EQUIPMENT

Furniture and equipment consisted of the following as of June 30, 2007 and
December 31, 2006:

                                                2007                2006
                                          -----------------   -----------------
     Furniture and fixtures                $        12,272     $        12,272

     Computers and equipment                        67,256              63,452
                                          -----------------   -----------------

          Total                                     79,528              75,724

     Less: accumulated depreciation                (48,606)            (40,597)
                                          -----------------   -----------------

     Machinery and equipment, net          $        30,922     $        35,127
                                          =================   =================

Depreciation expense amounted to $8,009 for the six months ended June 30, 2007
and $7,423 for the six months ended June 30, 2006.

NOTE 5 - CONCENTRATION OF CREDIT RISK

The Company maintains its cash in bank deposit accounts and the balances may
exceed federally insured limits from time to time. The Company has not
experienced any losses in such accounts and believes it is not exposed to any
significant risks on its cash in bank deposit accounts. As of June 30, 2007, the
Company did not have deposits in excess of federally insured limits.

NOTE 6 - DEVELOPED SOFTWARE

The Company has developed internal use software for the purpose of managing its
wireless network and specific services. The total capitalized cost of this
software at June 30, 2007 and December 31, 2006 was $576,568. Accumulated
amortization amounted to $75,753 and $56,587 as of June 30, 2007 and December
31, 2006, respectively. Amortization expense amounted to $19,166 and $22,354 for
the periods ended June 30, 2007 and June 30, 2006.

NOTE 7 - INTANGIBLE ASSETS

Intangible assets consisted of the following at June 30, 2007 and December 31,
2006:

                                                2007                2006
                                          -----------------   -----------------

     Patent application costs              $        60,982     $        60,982

     Website development costs                      40,908              40,908

     Network interconnection                         5,300               5,300
                                          -----------------   -----------------

          Total                                    107,190             107,190

     Less: accumulated amortization                (49,439)            (43,016)
                                          -----------------   -----------------

     Intangible assets, net                $        57,751     $        64,174
                                          =================   =================

                                       13
<PAGE>

Amortization expense amounted to $6,423 for the period ended June 30, 2007 and
$7,477 for the period ended June 30, 2006.

NOTE 8 - INCOME TAXES

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial statement
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax assets and liabilities at June 30, 2007 are as
follows:

     Deferred tax asset
         Federal net operating loss                       $   2,431,239

         State net operating loss                               428,145
                                                         ---------------

             Total deferred tax asset                         2,859,384

     Less valuation allowance                                (2,859,384)
                                                         ---------------

             Deferred tax asset, net                      $          --
                                                         ===============

At June 30, 2007 and June 30, 2006, the Company had federal and state net
operating loss ("NOL") carryforwards of approximately $14,286,449 and
$4,944,905, respectively. Federal NOL's could, if unused, expire in 2023. State
NOL's, if unused, could expire in 2013.

The Company has provided a 100% valuation allowance on the deferred tax assets
at June 30, 2007 and December 31, 2006 to reduce such asset to zero, since there
is no assurance that the Company will generate future taxable income to utilize
such asset. Management will review this valuation allowance requirement
periodically and make adjustments as warranted.

The reconciliation of the effective income tax rate to the federal statutory
rate for the periods ended June 30, 2007 and December 31, 2006, are as follows:

                                                2007                2006
                                          -----------------   -----------------
   U. S. Federal Statutory rate                 34.0%               34.0%

   State tax rate, net of federal benefit        6.0                 6.0

   Less valuation allowance                    (40.0)              (40.0)
                                          -----------------   -----------------

   Effective income tax rate                      --%                 --%
                                          =================   =================


                                       14
<PAGE>

NOTE 9 - RELATED PARTY TRANSACTIONS

NOTES PAYABLE.

The Company has received loans from related parties. These related parties
consist of various members of management who are also stockholders. The related
parties also consist of an employee, a relative of the CEO, and a stockholder of
the Company. As of June 30, 2007 and December 31, 2006, the Company had loans
due to related parties of $215,575 and $193,658, respectively. Loans due to
related parties consisted of the following:

<TABLE>
                                                                                   2007               2006
                                                                             -----------------  -----------------
<S>                                                                           <C>                <C>
Promissory note issued to Claude Buchert, CEO, on December 30, 2004
with interest of 10%. Principal along with accrued interest are due
on or before June 30, 2005.                                                   $        18,809    $         5,209

Promissory note issued to Edward Shirley, relative of Vice President,
on February 23, 2004 with interest of 10%, with the remaining principal
balance and accrued interest due on December 31, 2004.                                 30,000             30,000

Promissory notes issued to Humax West, Inc., stockholders, on various
dates between January 26, 2006 and February 16, 2006 with interest of 10%.
Principal along with accrued interest are payable on the maturity date
March 30, 2006. The amount due in 2005 contain options for the Holder to
receive shares of the Company stock in lieu of repayment of principal and
was converted in 2006. The 2006 loan is non-convertible.                               30,000          30,000 (1)

Promissory note issued to Stephanie Buchert, relative of CEO, on May 1,
2004 with interest of 10%, with the outstanding principal balance and
accrued interest due on December 31, 2004.                                              9,093              9,093

Promissory note issued to Celine Coicaud,  employee, on December 31, 2003
with interest of 10% with an additional payment of $9,900 due August 10,
2004 and the remaining principal balance and accrued interest due on
December 31, 2004.                                                                         --              8,870

Promissory note issued to Helene Legendre, Vice President and stockholder,
on June 30, 2004 with interest of 10%, with the remaining principal balance
and accrued interest due on December 31, 2004.                                        119,651            110,486
                                                                             -----------------  -----------------

     Totals notes payable - related                                           $       207,553    $       193,658
                                                                             =================  =================
</TABLE>

(1) The number for Humax West, Inc. for December 31, 2006 was incorrectly
reported in the March 31, 2007 Form 10-OQSB as $326,000.

                                       15
<PAGE>

Total interest expense for the periods ended June 30, 2007 and June 30, 2006 for
related parties amounted to $10,553 and $8,624, respectively. The Company is
currently in default on various notes payable and is in the process of
negotiating settlements or payments. All notes are included in current
liabilities.

MANAGEMENT FEES.

The Company has employment agreements with two members of management through
March 2008. These agreements are cancelable at any time by the Company or member
of management. As of June 30, 2007 and December 31, 2006, the Company had
$226,910 and $202,481, respectively, payable to management in arrears under
these agreements. Expenses related to these agreements are recorded in general
and administrative expense and amounted to $72,737 and $70,000 for the periods
ended June 30, 2007 and June 30, 2006, respectively.

NOTE 10 - LEASES

The Company leases its office facility under a month-to-month lease.

CAPITAL LEASES.

The Company leases certain computers under agreements that are classified as
capital leases. The cost of equipment under capital leases is included in the
balance sheets as furniture and equipment and amounted to $32,140 at June 30,
2007. Accumulated amortization of the leased equipment at June 30, 2007 was
$13,965. Amortization of assets under capital leases is included in depreciation
expense.

The future minimum lease payments required under the capital leases and the
present value of the net minimum lease payments as of June 30, 2007, are as
follows:

<TABLE>
                                                                       Six Months
                                                                     Ending June 30,          Amount
                                                                   -------------------  -------------------
<S>                                                                        <C>           <C>
                                                                           2008          $           4,666
                                                                           2009                      4,833
                                                                     Thereafter                         --
                                                                                        -------------------
    Total minimum lease payments                                                                     9,499

      Less: amount representing interest                                                            (1,478)
                                                                                        -------------------

    Present value of net minimum lease payments                                                      8,021

      Less: current maturities of capital lease obligations                                         (4,666)
                                                                                        -------------------

Long-term capital lease obligations                                                      $           3,355
                                                                                        ===================
</TABLE>

                                       16
<PAGE>

NOTE 11 - NOTES PAYABLE

As of June 30, 2007 and December 31, 2006, the Company had notes payable of
$407,586 and $87,586, respectively.

<TABLE>
                                                                              2006                2005
                                                                       ------------------  ------------------
<S>                                                                     <C>                 <C>
Promissory note issued to James Bell on May 26, 2004 in the
amount or $25,000 with interest of 10%. There are no monthly
payments and the principal along with the accrued interest is
due on or before December 31, 2005 or the date the Company
received proceeds from the public offering of its shares,
whichever is earlier. The promissory note contains an option
for the holder to receive 1% of the outstanding shares in lieu
of repayment of principal.                                              $         25,000    $         25,000

Promissory notes issued to ARABIA Corporation on various dates
between September 18, 2003 and May 18, 2004 with interest of
10%. Principal along with accrued interest is payable on the
maturity dates between September 18, 2004 and December 31,
2004.                                                                             55,000              55,000

Promissory note issued to Sax Public Relations, Inc. December
1, 2005 with interest accruing from September 1, 2005 at 10%.
Payments of $1,000 to be made monthly beginning February 1,
2006 through March 2007.                                                           7,586               7,586

Promissory note issued to First Bridge Capital on January 23,
2007 and will be converted into shares of Preferred Series A
stock at the end of August 2007.                                                 320,000                  --
                                                                       ------------------  ------------------

Total notes payable                                                     $        407,586    $         87,586
                                                                       ==================  ==================
</TABLE>

The Company is currently in default on various notes payable and is in the
process of negotiating settlements or payments. All notes payable are included
in current liabilities.

NOTE 12 - STOCKHOLDERS' EQUITY

Following the completion of the reverse merger, the Company had two classes of
stock.

PREFERRED STOCK.

The Company has one class of preferred stock with a par value of $0.001. The
Company has 5,000,000 shares authorized and had 3,000,000 Series 2006 preferred
shares issued and outstanding.

                                       17
<PAGE>

COMMON STOCK.

The Company has one class of common stock with a par value of $0.001. The
Company had 45,000,000 shares authorized and 44,772,159 issued and outstanding
just prior to December 1, 2006 in connection with the Company's re-domestication
(see Note 1). On December 1, 2006, the Company implemented a 1 for 20 reverse
stock split of all its issued and outstanding shares. After the reverse stock
split, there were 2,238,608 shares of common stock issued and outstanding. At
the date of the reverse split, the Company had 3,000,000 shares of convertible
preferred stock issued and outstanding. All preferred shares were converted into
20,250,000 shares of post reverse split common stock.

Prior to the reverse split, the Company had made promises to issue more common
stock, but was unable to due to a lack of authorized shares. Before the merger
completed in November 2006, the Company was in the process of attempting to
increase the number of authorized common stock shares. Accordingly all promises
to issue common stock were classified as a liability. See descriptions of
transactions below.

(a)   In December 2006, accounts payable to a consulting company in the amount
of $12,698 was converted into 22,650 common shares with a par value of $0.001
per share. The Company recorded common stock in the amount of $23 and additional
paid in capital ("APIC") in the amount of $12,675. As of March 31, 2007, this
agreement was finalized. However, stock certificates were not issued until
subsequent to year-end. As of March 31, 2007, 2006, the shares were considered
outstanding.

(b)   In December 2006, accounts payable to a consulting company in the amount
of $34,830 was converted into 35,000 common shares with a par value of $0.001
per share. The Company recorded common stock in the amount of $35 and APIC in
the amount of $34,795. As of March 31, 2007, this agreement was finalized.
However, stock certificates were not issued until subsequent to year-end. As of
March 31, 2007, the shares were considered outstanding.

(c)   In August 2006, the Company entered into a funding agreement with First
Bridge Capital Incorporated for working capital purposes. First Bridge Capital
will make serial investments in the maximum amount of $1,000,000 for a future
exchange of the Company's convertible preferred stock. Before re-domestication,
the Company had received $538,500 in advance payments from First Bridge Capital.
However, after the re-domestication was completed, all advance payment of
$538,500 and related accrued interests of $12,456 were converted into 5,510
shares of preferred stock at year end, on the basis of 1 preferred share issued
for each $100 owed. As of March 31, 2007, this agreement was finalized. However,
stock certificates were not issued until subsequent to year-end. As of March 31,
2007, the shares were considered outstanding.

In January 2007, First Capital issued a note in the amount of $15,000 to the
Company. After the inception of the note, the Company entered into an agreement
with First Bridge Capital and converted the note into 150 shares of preferred
stock on the basis of 1 preferred share issued for each $100 owed. At the date
of conversion, the market price of preferred stock was $0.51. The company
recorded $0.15 of preferred stock account and $14,999.85 of additional paid in
capital.

In connection with the funding agreement, the Company issued First Bridge
Capital 50,000 (1,000,000 pre reverse split) common stock warrants. These
warrants were valued at $20,000 as that was the cash payment equivalent of the
value of services. The Company accounted for these warrants as a liability for
derivative instruments as they didn't have enough authorized shares to issue
stock for these warrants. The Company valued these warrants at September 30,
2006 using the Black-Scholes model and determined that the value as of September
30, 2006 was $4,965. Accordingly the Company recognized a gain on the change in
fair value of derivative instruments in the amount of $15,035 and reduced their
initial $20,000 liability to $4,965. The factors used for the Black Scholes
model were a market price of $0.05 per share; volatility of 150%; risk free
interest rate of 6%; exercise price of $0.001 per share; and an estimated life
of 4.8 years.

                                       18
<PAGE>

As a result of recapitalization in November 2006, the Company had more shares
authorized to be issued. Therefore, the derivative liability in the amount of
$4,965 arisen due to a lack of authorized shares had to be eliminated and
accounted for as equity. The value for the derivative liability needed to be
re-calculated using the Black Scholes model as of December 1, 2006 (the date of
the reverse split). The recalculated value of the derivative liability was
$14,836, which became an addition to APIC. The remaining value of $9,871, after
eliminating derivative liability, was recognized as a loss on derivative. The
factors used for the Black Scholes model were a market price of $0.30 per share;
volatility of 178%; risk free interest rate of 4.39%; exercise price of $.02 per
share; and an estimated life of 4.55 years.

(d)   In January 2007, the Company issued 65,000 shares of common stock with a
par value of $0.001 to Karen Dix for consulting services provided to the
Company. At the date of issuance, the market price of the Company's common stock
was $0.51 per share. The Company recorded $65 in common stock and $33,085 in
additional paid in capital.

(e)   In 2006, a third party exercised 290,000 (5,800,000 pre reverse-split)
warrants pursuant to a settlement agreement executed on December 31, 2005. The
Company issued 290,000 shares of its common stock related to the transaction and
the value was recorded as paid in capital.

(f)   In July 2006, a settlement agreement was agreed upon between the Company
and a consulting group for financial public relations services that was
performed. The Company was to issue 7,700,000 shares of common stock for
compensation for the services performed by the consulting group. The value of
the shares on the date of issuance was based on the fair market value of the
common shares on the date of settlement. The Company had recorded this expense
as public relations services expense in the amount of $847,000. However, the
Company did not have sufficient common shares authorized and did not have
sufficient un-issued shares available to settle this contract at the time of
settlement. Therefore, 4,990,000 (249,500 post split) common shares were issued
to the consulting group as of September 30, 2006. The Company still owed
2,710,000 shares to complete this settlement. A liability to issue the remaining
shares was recorded based on the market price at the time of the settlement of
$0.11 per share.

As of September 3, 2006, the stock price had fallen to $0.05 per share.
Accordingly the Company recognized a gain on the change in fair value of
derivative instruments of $162,600 for the three months ending September 30,
2006. The remaining liability of $135,400 was included on the balance sheet as a
liability for derivative instruments. Following the company's recapitalization,
2.71 million shares of common stock were issued to the consulting group on
December 11, 2006. Per the settlement, these shares were not adjusted for the
reverse split. Therefore, the derivative liability in the amount of $135,400
arisen due to a lack of authorized shares had to be eliminated and accounted for
as equity. In addition, due to changes in market value for common stock, the
value for the derivative liability needed to be adjusted before any changes were
made as of December 11, 2006. The recalculated value for the derivative
liability was $1,626,000, of which $54,200 was recognized as common stock and
$1,571,800 was recognized as APIC. The remaining value after offsetting
derivative liability in the amount of $1,626,000 was recognized as a loss on
derivative after elimination of the derivative liability. The adjusted value of
the derivative was calculated by number of shares to be issued multiplied by the
market price per share at the time of issuance.

                                       19
<PAGE>

(g)   In 2006, the Company contracted with a third party to perform public
relations services that amounted to $24,000. The Company agreed to pay for these
services in common stock based upon the average 30 day trading price at a
specified time during the year. The average trading price determined was $0.29
per share, resulting in the need to issue 4,137 (82,759 pre reverse split)
shares of stock. The Company did not have sufficient authorized common shares
available to settle this contract. Therefore a liability was accrued for the
service expense incurred of $24,000. As of September 30, 2006, the price of the
stock had dropped to $0.05 per share. Accordingly, the company recognized a gain
on the change in fair value of derivative instruments of $19,862 for the three
months ended September 30, 2006. The remaining liability of $4,138 was included
on the balance sheet as a liability. As of December 31, 2006,the market value of
derivative liability was $2,152, which was calculated by multiplying 4,137
shares with market price on December 31, 2006 of $0.52. The difference of $1,986
was, then, recognized as gain on derivative, accordingly. As of June 30, 2007,
the market value of derivative liability was $496, which was calculated by
multiplying 4,137 shares with a market price of $0.14 on June 30, 2007. The
difference of $1,572 was then recognized as gain on derivative, accordingly.

The Company, during the quarter ended June 30, 2007, issued 1,832,000 shares of
common stock for repayment considerations for accounts payable in the amount of
$227,342 and management fees and salary payables totaling $107,088. The stock
was issued at various dates during the quarter ended June 30, 2007 with market
prices ranging from $0.12 to $0.22. At June 30, 2007, 594,500 shares have yet to
be sold by the vendors they were issued to. The company promised the vendors
that received the stock that the proceeds of their sale will equal the amount
the original issuance of stock paid them for otherwise, the company will issue
them more stock. The company is therefore contingently liable for these shares
related to the volatility of the market price of their stock. As of June 30,
2007, the market price was $0.14 cents per share. Because the 594,500 shares
were issued at prices higher than $0.14 cents per share, the company is
contingently liable for an additional $87,000 worth of stock to those vendors.
The amount of the exact liability will not be known until the vendors decide to
sell their stock.

The following schedule summarizes the total liability originally recognized, the
gain (loss) during the last fiscal year, the amount transferred to equity upon
recapitalization and the remaining liability at June 30, 2007:

                                       20
<PAGE>
<TABLE>
                                                                                       Liability
                                                                                         as of
                                  Original         Gain/(Loss)                        December 31,
                                  Liability        Recognized          Equity             2006
                               ---------------   ---------------   ---------------   ---------------
<S>                             <C>               <C>               <C>               <C>
Promise to issue convertible
preferred stock                 $     481,382     $          --     $     481,382     $          --
                               ---------------   ---------------   ---------------   ---------------

Settlement of 2,710,000
common shares due
                                      298,000        (1,328,000)        1,626,000                --

82,579 shares due to
public relations firm                  24,000            23,421                --               579

Common stock warrants to
First Bridge Capital                   20,000             5,164            14,836                --

Non-employee stock option
and warrants (Note 13)                581,157           459,166           121,991                --
                               ---------------   ---------------   ---------------   ---------------

     Total                        923,157 (1)          (840,249)        1,762,827               579
                               ---------------   ---------------   ---------------   ---------------

               Grand Total      $   1,404,539     $    (840,249)    $   2,244,209     $         579
                               ===============   ===============   ===============   ===============
</TABLE>

(1) This number was incorrectly reported in the March 31, 2007 Form 10-QSB as
$923,000.

NOTE 13 - STOCK OPTIONS AND WARRANTS

(a)   In January 2004, the Company granted an option to purchase 152,813
(3,056,250 pre reverse split) restricted shares of common stock, exercisable at
$1.00 ($0.05 pre split) per share, to a non-employee; this option vested in
April 2004. This option expires in January 2010 and was not valued at grant
date. Because the Company did not have sufficient shares authorized to issue if
the option was exercised, this amount was recorded as a derivative and
classified on the balance sheet as a liability for derivative instruments. The
Company revalued this option at September 30, 2006 using the Black-Scholes model
and determined that the value of this option was $136,431. Accordingly, the
Company recognized a loss on the change in fair value of derivative instruments
of $136,431 and increased the liability due as of September 30, 2006 to
$136,431. The factors used for the Black Scholes model were a market price of
$0.05 per share; volatility of 150%; risk free interest rate of 6%; exercise
price of $0.05 per share; and an estimated life of 4.25 years.

As a result of completed recapitalization in November 2006, the Company had more
shares authorized to be issued. Therefore, the derivative liability in the
amount of $136,431 arisen due to a lack of authorized shares had to be
eliminated and accounted for as equity. In addition, due to changes in market
value for the common stock, the value for the derivative liability had to be
recalculated using the Black-Scholes model as of December 1, 2006 (the date of
reverse split). The recalculated value for the derivative liability was $40,250,
which became an addition to APIC. The remaining difference of $96,181, after
eliminating derivative liability, was recognized as a gain on derivative. The
factors used for the Black-Scholes model were a market price of $0.30 per share;
volatility of 178%; risk free interest rate of 4.39%; exercise price of $1.00
per share; and an estimated life of 4 years.

                                       21
<PAGE>

(b)   In September 2005, the Company granted an option to purchase 40,750
(815,000 pre reverse split) restricted shares of common stock (TelePlus stock
options), exercisable at $1.00 ($0.05 pre reverse split) per share, to an
employee that vests and expires on January 15, 2010. This option was exchanged
for an option to purchase 45,000 restricted shares of common stock (the
equivalent of a 366,750 shares Texxon stock option) issued in May 2006 and an
option to purchase 30,000 restricted shares of common stock (the equivalent of a
244,500 Texxon stock option). Due to the fact that the Company has been
generating recurring losses and also not having an active market to trade its
shares, the value of these options was determined to be zero and accordingly, no
expense or paid in capital has been recorded. The performance-based option
issued to this employee was a part of a performance based stock options issuance
transaction that involved other employees (see subsequent paragraph on
performance based stock options issued in May for more details on this
transaction).

(c)   In September 2005, the Company granted an option to purchase 40,750
(815,000 pre reverse split) restricted shares of common stock, exercisable at
$0.02 ($0.001 pre reverse split) per share, to a non-employee; this option
expires on January 15, 2010. The option was granted in exchange for consulting
services valued at $40,000. The Company has recorded consulting expense in this
amount to reflect the value of these options for the year ended December 31,
2005. Because the Company did not have sufficient shares authorized to issue if
the option was exercised, this amount was recorded as a derivative and
classified on the balance sheet as a liability for derivative instruments. The
Company revalued this option at September 30, 2006 using the Black-Scholes model
and determined that the value of this option was $38,305. Accordingly, the
Company recognized a gain on the change in fair value of derivative instruments
of $1,695 and reduced their liability due as of September 30, 2006 to $38,305.
The factors used for the Black-Scholes model were a market price of $0.05 per
share; volatility of 150%; risk free interest rate of 6%; exercise price of
$0.001 per share; and an estimated life of 3.5 years.

As a result of the recapitalization in November 2006, the Company had more
shares authorized to be issued. Therefore, the derivative liability in the
amount of $38,305 due to a lack of authorized shares had to be eliminated and
accounted for as equity. In addition, due to changes in market value for the
common stock, the value for the derivative liability had to be recalculated
using the Black-Scholes model as of December 1, 2006 (the date of reverse
split). The recalculated value for the derivative liability was $11,980, which
became an addition to APIC. The remaining difference after eliminating
derivative liability in the amount of $26,325 was recognized as a gain on
derivative. The factors used for the Black-Scholes model were a market price of
$0.30 per share; volatility of 178%; risk free interest rate of 4.43%; exercise
price of $0.02 per share; and an estimated life of 3.25 years.

                                       22
<PAGE>

(d)   In February 2006, the Company granted an option to purchase 65,000
(1,300,000 pre reverse split) restricted shares of common stock, exercisable at
$0.02 ($0.001 pre reverse split) per share, to a consultant for assistance in
the share exchange between Texxon and TelePlus. This option was valued at $0.10
per share. The value of the option was calculated using the Black-Scholes model
with the following assumptions: exercise price of $0.001; share price of $0.10;
risk free interest rate of 6.0%; expected life of 5 years; and estimated
volatility of 150%. The Company recorded the expense and additional paid in
capital in the amount of $130,000 to reflect the finder's fees expense involved
in the reverse merger acquisition process. Because the Company did not have
enough shares authorized to issue if the option was exercised, this amount was
recorded as a derivative and classified on the balance sheet as a liability for
derivative instruments. The Company revalued this option at September 30, 2006
using the Black-Scholes model and determined that the value of this option was
$64,493. Accordingly, the Company recognized a gain on the change in fair value
of derivative instruments of $65,507 and reduced the liability due as of
September 30, 2006 to $64,493. The factors used for the Black-Scholes model were
a market price of $0.05 per share; volatility of 150%; risk free interest rate
of 6%; exercise price of $0.001 per share; and an estimated life of 4.5 years.

As a result of the recapitalization in November 2006, the Company had more
shares authorized to be issued. Therefore, the derivative liability in the
amount of $64,493 due to a lack of authorized shares had to be eliminated and
accounted for as equity. In addition, due to changes in market value for the
common stock, the value for the derivative liability had to be recalculated
using the Black-Scholes model as of December 1, 2006 (the date of reverse
split). The recalculated value for the derivative liability was $19,255, which
became an addition to APIC. The remaining difference after offsetting derivative
liability in the amount of $45,238 was recognized as a gain on derivative after
elimination of the derivative liability. The factors used for the Black-Scholes
model were a market price of $0.30 per share; volatility of 178%; risk free
interest rate of 4.39%; exercise price of $0.02 per share; and an estimated life
of 4.25 years.

(e)   In February 2006, the Company issued common stock warrants to two members
of the Company's then current management, and to a public relations firm. These
warrants were for purchase of 125,000 (2,500,000 pre split) restricted shares of
common stock, exercisable at $2.20 ($0.11 pre reverse split) per share. These
warrants were the only options/warrants from pre-merger Texxon to survive the
completion of the share exchange agreement (see Note 1); all other Texxon
warrants were cancelled. These warrants have been valued at $275,973 ($0.1104
per share). The value of the warrants was calculated as of February 1, 2006
using the Black-Scholes model with the following assumptions: exercise price of
$0.11; share price of $0.12; risk free interest rate of 4.4%; expected life of 5
years; and estimated volatility of 150%. These warrants were valued by Texxon
prior to the merger and the effect of their issuance is included in the
additional paid in capital as a result of the merger.

(f)   In April 2006, the Company granted an option to purchase 36,675 (733,500
pre reverse split) restricted shares of common stock, exercisable at $0.02
($0.001 pre reverse split) per share, to a consultant in exchange for consulting
services valued at its fair market value for the services performed at $40,343.
Because the Company did not have sufficient shares authorized to issue if the
options were exercised, this amount was recorded as a derivative and classified
on the balance sheet as a liability for derivative instruments. The Company
revalued this option at September 30, 2006 using the Black-Scholes model and
determined that the value of this option was $36,287. Accordingly, the Company
recognized a gain on the change in fair value of derivative instruments of
$4,056 and reduced their liability due as of September 30, 2006 to $36,287. The
factors used for the Black-Scholes model were a market price of $0.05 per share;
volatility of 150%; risk free interest rate of 6%; exercise price of $0.001 per
share; and an estimated life of 3.5 years.

                                       23
<PAGE>

As a result of the recapitalization in November 2006, the Company had more
shares authorized to be issued. Therefore, the derivative liability in the
amount of $36,287 due to a lack of authorized shares had to be eliminated and
accounted for as equity. In addition, due to changes in market value for the
common stock, the value for the derivative liability had to be recalculated
using the Black-Scholes model as of December 1, 2006 (the date of reverse
split). The recalculated value for the derivative liability was $10,782, which
became an addition to APIC. The remaining difference after eliminating
derivative liability in the amount of $25,505 was recognized as a gain on
derivative. The factors used for the Black-Scholes model were a market price of
$0.30 per share; volatility of 178%; risk free interest rate of 4.43%; exercise
price of $0.02 per share; and an estimated life of 3.25 years.

(g)   In April 2006, the Company granted an option to purchase 6,113 (122,250
pre reverse split) restricted shares of common stock, exercisable at $0.02
($0.001 pre reverse split) per share, each to two employees (total of 12,225
(244,500 pre reverse split) shares of common stock). The option was valued at
$13,448 ($0.11 per share). The value of the option was calculated using the
Black-Scholes model with the following assumptions: exercise price of $0.001;
share price of $0.12; risk free interest rate of 6.0%; expected life of 4 years;
and estimated volatility of 150%. The Company recorded payroll expense and
additional paid in capital in the amount of $13,448 to reflect the value of
these options for the period ended September 30, 2006.

(h)   In April 2006, the Company granted an option to purchase 75,000 (1,500,000
pre reverse split) restricted shares of common stock, exercisable at $3.40
($0.17 pre reverse split) per share, to an investment banking and financial
advisory organization as partial compensation for assistance in identifying
suitable acquisition targets and long term funding. This option was valued at
$0.156 per share. The value of the option was calculated using the Black-Scholes
option pricing model with the following assumptions: exercise price of $0.17;
share price of $0.17; risk free interest rate of 6.0%; expected life of 5 years;
and estimated volatility of 150%. The Company recorded an increase and decrease
to additional paid in capital in the amount of $234,000 to reflect the finder's
fees expense involved in the reverse merger acquisition process. Because the
Company did not have enough shares authorized to issue if the option was
exercised, this amount was recorded as a derivative and classified on the
balance sheet as a liability for derivative instruments. The Company revalued
this option at September 30, 2006 using the Black-Scholes model and determined
that the value of this option was $61,917. Accordingly, the Company recognized a
gain on the change in fair value of derivative instruments of $172,611 and
reduced the liability due as of September 30, 2006 to $61,917. The factors used
for the Black-Scholes model were a market price of $0.05 per share; volatility
of 150%; risk free interest rate of 6%; exercise price of $0.17 per share; and
an estimated life of 4.5 years.

                                       24
<PAGE>

As a result of the recapitalization in November 2006, the Company had more
shares authorized to be issued. Therefore, the derivative liability in the
amount of $61,917 due to a lack of authorized shares had to be eliminated and
accounted for as equity. In addition, due to changes in market value for the
common stock, the value for the derivative liability had to be recalculated
using the Black-Scholes model as of December 1, 2006 (the date of reverse
split). The recalculated value for the derivative liability was $18,482, which
became an addition to APIC. The remaining difference after eliminating
derivative liability in the amount of $43,435 was recognized as a gain on
derivative. The factors used for the Black-Scholes model were a market price of
$0.30 per share; volatility of 178%; risk free interest rate of 4.39%; exercise
price of $3.40 per share; and an estimated life of 4.25 years.

(i)   In May 2006, the Company granted an option to purchase 26,488 (529,750 pre
reverse split) restricted shares of common stock, exercisable at $0.02 ($0.001
pre reverse split) per share, each to two members of management (total of 52,975
(1,059,500 pre reverse split) shares of common stock). Each option was valued at
$58,273 ($0.11 per share). The value of the option was calculated using the
Black-Scholes option pricing model with the following assumptions: exercise
price of $0.001; share price of $0.12; risk free interest rate of 6.0%; expected
life of 4 years; and estimated volatility of 150%. The Company recorded the
payroll expense and additional paid in capital in the amount of $58,273 to
reflect the value of these options for the period ended September 30, 2006.

(j)   In May 2006, the Company granted an option to purchase 18,338 (366,750 pre
reverse split) restricted shares of common stock, exercisable at $0.02 ($0.001
pre reverse split) per share, to one employee. The option was valued at $0.12
per share. The value of the option was calculated using the Black-Scholes model
with the following assumptions: exercise price of $0.001; share price of $0.12;
risk free interest rate of 6.0%; expected life of 4 years; and estimated
volatility of 150%. The Company recorded payroll expense and additional paid in
capital in the amount of $20,171 to reflect the value of this option for the
period ended September 30, 2006.

(k)   The Company granted options to purchase 176,875 (3,537,500 pre reverse
split) restricted shares of common stock to employees on May 25, 2006 (based on
performance), exercisable at $0.02 ($0.001 pre reverse split), that vest
immediately. At the time of grant, the Company was unable to determine whether
the Company would meet the requirement needed in order to grant the options. Due
to these facts, no expense or paid in capital has been recorded.

(l)   In July 2006, the Company contracted with a third party to perform public
relations services. The total value of the services to be provided was $500,000;
the term of the contract was one year. The Company granted a warrant to purchase
192,308 (3,846,154 pre reverse split) restricted shares of common stock,
exercisable at $0.02 ($0.001 pre reverse split) per share. Because of the
one-year term of the contract, the Company only recognized the grant of a
warrant to purchase 961,538 shares at an expense of $125,000. The Company
accounted for this warrant as a liability for derivative instruments as the
Company did not have sufficient authorized shares to issue if the warrant was
exercised. The Company valued this warrant at September 30, 2006 using the
Black-Scholes model and determined that the value was $47,736. Accordingly, the
Company recognized a gain on the change in fair value of derivative instruments
in the amount of $120,226 and reduced the initial $125,000 liability to $47,736.
The factors used for the Black-Scholes model were a market price of $0.05 per
share; volatility of 150%; risk free interest rate of 6%; exercise price of
$0.001 per share; and an estimated life of 4.8 years.

                                       25
<PAGE>

As a result of recapitalization in November 2006, the Company had more shares
authorized to be issued. Therefore, the derivative liability in the amount of
$47,736 due to a lack of authorized shares had to be eliminated and accounted
for as equity. In addition, due to changes in market value for the common stock,
the value for the derivative liability had to be recalculated using the
Black-Scholes model as of December 1, 2006 (the date of reverse split). The
recalculated value for the derivative liability was $14,266, which became an
addition to APIC. The remaining difference after offsetting derivative liability
in the amount of $33,470 was recognized as a gain on derivative after
elimination of the derivative liability. The factors used for the Black-Scholes
model were a market price of $0.30 per share; volatility of 178%; risk free
interest rate of 4.39%; exercise price of $0.02 per share; and an estimated life
of 4.55 years.

In 2007, an additional 144,231 warrants were issued under this contract. The
Company used the Black-Scholes model to value these options. The factors used
were a market price of $0.79 per share; volatility of 178%; risk free interest
rate of 6%; exercise price of $0.02 per share; and an estimated life of 4 years.
This resulted in $81,130 of additional paid in capital.

(m)   In October 2006, the Company granted an option to purchase 10,000 (200,000
pre reverse split) restricted shares of common stock, exercisable at $0.01 per
share, to a non-employee; this option will expire on October 15, 2011. This
option was granted in exchange for consulting services, valued at $11,814 using
the Black-Scholes model. Because the Company did not have enough shares
authorized to issue if this option was exercised, this amount was recorded as a
derivative and are classified on the balance sheet as a liability for derivative
instruments. The factors used for the Black-Scholes model were a market price of
$0.06 per share; volatility of 178%; risk free interest rate of 4.39%; exercise
price of $0.01 per share; and an estimated life of 5 years.

As a result of recapitalization in November 2006, the Company had more shares
authorized to be issued. Therefore, the derivative liability in the amount of
$11,814 due to a lack of authorized shares had to be eliminated and accounted
for as equity. In addition, due to changes in market value for the common stock,
the value for the derivative liability had to be recalculated using the
Black-Scholes model as of December 1, 2006 (the date of reverse split). The
recalculated value for the derivative liability was $6,976, which became an
addition to APIC. The remaining difference of $4,838 after elimination of
derivative liability was recognized as a gain on derivative. The factors used
for the Black-Scholes model were a market price of $0.70 per share; volatility
of 178%; risk free interest rate of 4.39%; exercise price of $0.01 per share;
and an estimated life of 4.75 years.

(n)   In December 2006, the Company granted an option to purchase 70,000
restricted shares of common stock, exercisable at $0.01 per share, to a
non-employee; this option will expire on December 31, 2011. This option was
granted in exchange for consulting services, valued at $48,846 using the
Black-Scholes model. The Company recorded consulting expense and additional
paid-in-capital in this amount. The factors used for Black-Scholes model were a
market price of $0.70 per share; volatility of 178%; risk free interest rate of
4.39%; exercise price of $0.01; and a estimated lift of 5.00 years.

                                       26
<PAGE>

(o)   In December 2006, the Company granted options to purchase 414,900
restricted shares of common stock, exercisable at $0.01 per shares, for
consultants (one of which is James Gibson, the Company's vice president business
development); these options will expire on December 31, 2011. These options were
valued at $215,748 using the Black-Scholes model. The Company recorded
consulting expense and additional paid-in-capital in this amount. The factors
used for Black-Scholes model were a market price of $0.52 per share; volatility
of 178%; risk free interest rate of 4.39%; exercise price of $0.01; and a
estimated life of 5.00 years.

(p)   In December 2006, the Company granted options to purchase 179,300
restricted shares of common stock, exercisable at $0.01 per share, to various
employees (one of which is Ross Nordin, the Company's former chief financial
officer, remaining as an advisor to the Company); these options will expire on
December 31, 2011. These options were valued at $93,236 using Black-Scholes
model. The company recorded consulting expense and additional paid-in-capital in
this amount. The factors used for Black-Scholes model were a market price of
$0.52 per share; volatility of 178%; risk free interest rate of 4.39%; exercise
price of $0.01; and an estimated life of 5.00 years.

A summary of the status of, and changes in, the Company's stock warrant and
option grants of and for the six months ended June 30, 2007 is presented below
for all warrants and options granted to employees and non-employees:

<TABLE>
<CAPTION>
                                                      Six Months Ended June 30, 2007
                                             ------------------------------------------------
                                                                                  Weighted
                                                 Common           Common          Average
                                                  Stock            Stock          Exercise
                                                Warrants          Options           Price
                                             --------------   --------------   --------------
<S>                                                <C>            <C>                 <C>
     Outstanding at Beginning of Year              367,308        1,304,851           $ 0.68

     Granted                                       144,231               --               --

     Forfeited                                          --               --               --
                                             --------------   --------------   --------------

     Outstanding at End of Period                  511,539        1,304,851           $ 0.68
                                             ==============   ==============   ==============

     Exercisable at End of Period                  511,539        1,127,976
                                             ==============   ==============
</TABLE>

                                       27
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.

      The following management's discussion and analysis of financial condition
and results of operations is based upon, and should be read in conjunction with,
our unaudited financial statements and related notes included elsewhere in this
Form 10-QSB, which have been prepared in accordance with accounting principles
generally accepted in the United States.

OVERVIEW.

      The Company is a provider of various consumer telephony-related assistance
services and is located in Marina del Rey, California. As one of the first
emerging truly international MVNO's (mobile virtual network operators), the
Company has built a platform that can be used to provide a wide array of
services to mobile/WiFi phone and VOIP users worldwide.

      The Company is the parent company of Vocalenvision, a pioneer in the field
of wireless communications. The Company's main role is that of a research and
development incubator that endeavors to create new opportunities for its
subsidiaries for the continually evolving convergence of international GSM
wireless, WiFi and VoIP networks that create the vehicles that consistently
deliver its innovative "native-language" contents and services to the end-user
customer. In addition, the Company is actively seeking acquisition targets to
diversify the company's holdings and to strengthen the new "Continan
Communications" brand.

      Through its Vocalenvision subsidiary, the Company offers proprietary
products and services that help customers communicate effectively while
travelling abroad. Branded as Vocalyz(TM), the Company's wireless service has
market potential, boasting amongst its features a "teleconcierge", who is a live
operator trained to provide a variety of business-related and travel-related
services directly to a customer's mobile phone.

      Vocalenvision has to date expended much of its efforts and funds on
development of proprietary software and the initiation of its sales and
marketing efforts. It is uncertain about the market acceptance of its products
and services that, aside from voice transmission at a competitive rate, include
auxiliary services offered through its software-based platform and delivered to
the customer's cellular phone. The Company has contracted with large
international wireless providers to deliver Vocalyz(TM) services as value added
content to its customers while they roam in foreign countries.

      The Company maintains its network operations and primary customer service
center at its Los Angeles area headquarters, and has strategic relationships
with several service networks in the United States, Europe, and Asia.

      The Company is focused on the continued development and implementation of
a proprietary layered communications architecture that operates in unison with
conventional wireless, VoIP and PSTN networks in order to deliver
"native-language" services to its end customers.

                                       28
<PAGE>

      The Company operates many of its own "in-network" platforms as an
independent unit while using existing operator networks from the leading
international cellular service providers to transport the customer's calls as
well as deliver users "native-language" content. The Company supplies enhanced
services and on-demand information to its customers via wireless, WiFi and VoIP
devices in over 120 languages.

      Vocalenvision, Inc. is highly dependent upon the efforts and abilities of
its management. The loss of the services of any of them could have a substantial
adverse effect on it. Vocalenvision, Inc. has not purchased "Key-Man" insurance
policies on any of them.

      To date, Vocalenvision, Inc. has not yet had substantial sales. It expects
initial growth in its sales to come primarily from the private labeling of its
Vocalyz product which includes traveler's assistance, tele-concierge products,
native in-language interpretation and emergency coverage through International
Wireless Providers existing customer channels. These incumbent wireless carriers
view the Vocalyz(TM) product as a value add to their own existing wireless
content and services, while maximizing the security and convenience offer to
their wireless users while traveling abroad.

      Sales are anticipated to start mid 2007 in France, Italy, Spain and Great
Britain through a major provider of wireless services that is making the
Vocalenvision services available to all of its wireless users. It is anticipated
that the services will provide income to the Company but not sufficient to cover
all operational expenses during the following 12 months.

      As one of the first MVNO's to target international travelers, the Company
should be able to capture a large portion of the travel market by providing its
core services to a highly untapped market. By forming synergistic relationships
with various service providers and content providers, the Company will also be
able to continue to grow revenues significantly by offering the travelers a wide
array of services and content in their native languages.

      An additional application of the Vocalenvision service offering includes a
complete "Travel Kit" product, which includes a wireless telephone and SIM card.
The Travel Kit will be marketed to travelers prior to trip departure and will
work in selected international countries. In this model, the company is required
to supply customers with temporary mobile telephones as well as proprietary SIM
cards. Vocalenvision must purchase mobile phones and SIM cards in advance and
will require payment from customer prior to shipment. Thus, Vocalenvision's
development of the Travel Kit product is dependent on the number of telephones
and SIM cards which it can freely distribute and that, in turn, is dependent
upon Vocalenvision's available capital for the purchase of the hardware and
cards.

      However, a third application of Vocalenvison's existing technology
envisions the distribution only of its proprietary SIM Cards. The Vocalyz(TM)
SIM cards work on many major wireless networks in the USA and Europe. The SIM
card technology will transport the international travelers calls as well as
deliver users "native-language" translation assistance and tele-concierge; all
offered in over 120 languages. For the sales of this service Vocalenvision will
be dependent upon travel agents, brokers, retail stores and web based ecommerce.

                                       29
<PAGE>

      Vocalenvision does not have control of such representatives and is
therefore uncertain about its ability always to contact potential customers on a
timely basis.

      Because of the Company's proprietary platform technology, unique service
offering, development saving cost benefits, innovative content and sales
management experience, the Company believes its current business focus towards
this highly specific travel related niche allows it to position itself as a
sustainable business that will result in the company realizing positive cash
flow by the fourth quarter of 2008.

      The Company has historically experienced operating losses and negative
cash flow. The Company expects that these operating losses and negative cash
flows may continue through additional periods. Until recently, the Company has
had a limited record of revenue-producing operations but with the modified and
highly realistic product deployment strategy, the Company now believes it has a
predictable, scalable revenue and business model that is based on the Company's
short but proven revenue history will be able to achieve its business plans.

RESULTS OF OPERATIONS.

      The acquisition of TelePlus was considered to be a capital transaction in
substance, rather than a business combination. Inasmuch, the transaction is
equivalent to the issuance of stock by a development stage company (TelePlus)
for the net monetary assets of a public company (Texxon), accompanied by a
recapitalization. The accounting for the transaction is identical to that
resulting from a reverse acquisition, except goodwill and other intangible
assets were not recorded. Accordingly, these consolidated financial statements
are the historical financial statements of TelePlus.

      TelePlus was incorporated in the State of California on September 2, 2002.

(A)   REVENUES.

      Revenues were $2,042 for the six months ended June 30, 2007 compared to
$35,485 for the six months ended June 30, 2006, which were the proceeds of a
Beta marketing test in Japan with a CDMA cellular phones that was stopped on
July 2006. The decrease of $33,443, or approximately 94%, is explained by the
end of the Beta Test marketing. Revenues were $800 for the three months ended
June 30, 2007 compared to $8,034 for the three months ended June 30, 2006, a
decrease of $26,209 or approximately 95%. The decline in revenues was largely
due to the fact that the Company is still a development stage company.
Currently, the Company's focus has been on raising capital that is necessary to
fund its operations. In the six months ended June 30, 2006, the Company
generated revenue largely from a test marketing study. A similar study was not
performed in 2007 as management was focused on raising capital, developing a SIM
cards adaptable to most of GSM cellular phones and positioning itself as a
wholesaler to international Wireless provider.

      Revenues for the period from September 2, 2002 (inception) through March
31, 2007 were $131,912.

                                       30
<PAGE>

(B)   DIRECT COSTS

      Direct costs were $14,246 for the six months ended June 30, 2007 compared
to $151,503 for the six months ended June 30, 2006, a decrease of $137,257 or
approximately 91%. Direct costs were $13,034 for the three months ended June 30,
2007 compared to $77,158 for the three months ended June 30, 2006, a decrease of
$64,124 or approximately 83%. The decrease in direct costs was primarily related
to expenses incurred in the prior year for the Company's test market study. A
similar study was not performed in 2007 as management was focused on raising
capital and developing its three new products: (i) the wholesale of Vocalyz(TM)
products to major international wireless providers; (ii) the complete "Travel
Kit"; and (iii) the positioning of its SIM card with its proprietary software,
delivering an array of travelers' service and adaptable to most GSM cellular
phones in the U.S. and Europe.

(C)   GENERAL AND ADMINISTRATIVE EXPENSES.

      General and administrative expenses were $537,235 for the six months ended
June 30, 2007 compared to $579,152 for the six months ended June 30, 2006, a
decrease of $41,917 or approximately 7%. General and administrative expenses
were $274,627 for the six months ended June 30, 2007 compared to $360,900 for
the three months ended June 30, 2006, a decrease of $86,273 or approximately
24%. The decrease in expenses was largely due to decreased payroll expenses as
the Company reduced the number of its employees during the quarter to reduce its
expenses as much as possible.

(D)   NET LOSS.

      The net loss for the six months ended June 30, 2007 was $674,882 compared
to $853,550 for the six months ended June 30, 2006, a change of $178,668 or 21%.
The net loss was $366,971 for the three months ended June 30, 2007 compared to
$500,962 for the six months ended June 30, 2006, a decrease of $133,991 or
approximately 27%. The Company has actively tried to lower its expenses in the
current year in order to have cash available to focus on generating revenue. The
Company's primary focus remains on raising capital and accordingly has reduced
its payroll expenses solely to focus on raising capital and finalizing the
development of its three new products.

FACTORS THAT MAY AFFECT OPERATING RESULTS.

      The Company's operating results can vary significantly, depending upon a
number of factors, many of which are outside the Company's control. General
factors that may affect the Company's operating results include:

o     market acceptance of and change in demand for products/services;

o     a small number of customers account for, and may in future periods account
      for, substantial portions of the Company's revenue, and revenue could
      decline because of delays of customer orders or the failure to retain
      customers;

                                       31
<PAGE>

o     gain or loss of clients or strategic relationships;

o     announcement or introduction of new services and products by the Company
      or by its competitors;

o     the ability to build brand recognition;

o     timing of sales to customers;

o     price competition;

o     the ability to upgrade and develop systems and infrastructure to
      accommodate growth;

o     the ability to introduce and market products and services in accordance
      with market demand;

o     changes in governmental regulation;

o     reduction in or delay of capital spending by clients due to the effects of
      terrorism, war and political instability;

o     valuation of derivative liabilities; and

o     general economic conditions.

      The Company believes that its planned growth and profitability will depend
in large part on the ability to promote and position its various services and
gain clients. Accordingly, the Company intends to invest in marketing, strategic
partnerships and development of its client base. If the Company is not
successful in promoting its services and expanding its client base, this may
have a material adverse effect on its financial condition and the ability to
continue to operate its business.

The Company is also subject to the following specific factors that may affect
its operations:

(A)   THE COMPANY MAY NOT BE ABLE TO ACCOMMODATE RAPID GROWTH WHICH COULD
DECREASE REVENUES AND RESULT IN A LOSS OF CUSTOMERS.

      To manage anticipated growth, the Company must continue to implement and
improve its operational, financial and management information systems. The
Company needs to hire, train and retain additional qualified personnel, continue
to expand and upgrade core technologies, and effectively manage its
relationships with its major customers, end users, suppliers and other third
parties. The Company's expansion could place a significant strain on its current
services and support operations, sales and administrative personnel, capital and
other resources. Tthe Company could experience difficulties meeting demand for
its products. The Company cannot guarantee that its systems, procedures or
controls will be adequate to support operations, or that management will be
capable of fully exploiting the market. The Company's failure to effectively
manage growth could adversely affect its business and financial results.

                                       32
<PAGE>

(B)   THE COMPANY'S CUSTOMERS REQUIRE A HIGH DEGREE OF RELIABILITY IN EQUIPMENT
AND SERVICES, AND IF THE COMPANY CANNOT MEET THEIR EXPECTATIONS, DEMAND FOR ITS
PRODUCTS/SERVICES MAY DECLINE.

      Any failure to provide reliable equipment and services for the Company's
customers, whether or not caused by their own failure, could reduce demand for
the Company's services. The Company continues to improve its services and
related technology and as such, the Company does not expect negative customer
response however this cannot be assured. Negative customer response could impair
the Company's reputation and impair its ability to make future sales.

(C)   DEPENDENCE ON SUPPLIERS MAY AFFECT THE ABILITY OF THE COMPANY TO CONDUCT
BUSINESS.

      For the "Travel Kit" product, the Company supplies telephones to its
customers that contain its own proprietary SIM cards, and which channel calls
into its network via a platform, from which interpreters and concierge services
are available. The Company must purchase these telephones that require payment
prior to shipment. Thus, the Company's growth depends on the number of
telephones available for distribution through rentals and sales, and that, in
turn, depend upon available capital for the purchases. Often the availability of
telephones at the best prices is dependent upon the Company's ability to commit
to an immediate purchase and to pay immediately. If the Company cannot buy
telephones in sufficient numbers or at favorable rates, its revenues may decline
or operating expenses may increase. Should the availability of telephone be
compromised, it could force the Company to develop alternative designs, which
could add to the cost of goods sold and compromise delivery commitments. In such
an instance, the Company would not be able to meet the needs of its customers
for a period of time, which could materially adversely affect its business,
results from operations, and financial condition.

      For the wholesale applications of the Vocalyz(TM) white labeled for major
international Wireless providers, the Company has limited control over any
third-party sub-contractor as to quality controls, and its customers. The
wireless providers may decrease the number of customer traffic sent to
Vocalyz(TM), generating loss of revenue and subsequently affecting results from
operation.

      For the part of the Travel Kit, i.e. its SIM cards sold separately, the
company also has limited control over any third party sub-contractors in terms
of quality control. The company uses its own reliable platform and technology
and as such, does not expect failures. However this cannot be assured. Negative
technical failures could impair the Company's reputation and its ability to gain
future channels of distribution.

                                       33
<PAGE>

(D)   THE COMPANY FACES STRONG COMPETITION IN ITS MARKET, WHICH COULD MAKE IT
DIFFICULT FOR THE COMPANY TO GENERATE REVENUES.

      The Company's future success will depend on its ability to adapt to
rapidly changing technologies, evolving industry standards, product offerings
and evolving demands of the marketplace. For the "Travel Kit" and SIM cards, the
Company competes for customers primarily with facilities-based carriers, as well
as with other non-facilities-based network operators. Some of the Company's
competitors have substantially greater resources, larger customer bases, longer
operating histories and greater name recognition than the Company has.

o     Some of competitors provide functionalities that the Company does not.
      Potential customers who desire these functions and have no need for
      teleconcierge services, native language translations as well as the array
      of services of Vocalenvision, may choose to obtain their equipment from
      the competitor that provides these additional functions.

o     Potential customers may be motivated to purchase their wireless services
      from a competitor in order to maintain or enhance their respective
      business relationships with that competitor.

In addition, the Company's competitors may also be better positioned to address
technological and market developments or may react more favorably to
technological changes

      Competitors may develop or offer services that provide significant
(technological, creative, performance, price) or other advantages over the
services offered by the Company. If the Company fails to gain market share or
loses existing market share, its financial condition, operating results and
business could be adversely affected and the value of the investment in the
Company could be reduced significantly. The Company may not have the financial
resources, technical expertise, marketing, and distribution or support
capabilities to compete successfully.

      The Company believes that as the cost to the consumer for voice
transmission decreases, consumers will be attracted by the additional services
available from transmission service providers. While at the present time our
interpreter and concierge services are relatively unique, a larger, better
financed transmission service provider might decide to develop its own
competitive services to offer to its own customer base, thereby keeping them
from migrating to us.

(E)   UNCERTAIN DEMAND FOR SERVICES MAY CAUSE REVENUES TO FALL SHORT OF
EXPECTATIONS AND EXPENSES TO BE HIGHER THAN FORECAST IF THE COMPANY NEEDS TO
INCUR MORE MARKETING COSTS.

      The Company is unable to forecast revenues with certainty because the
Company may not continue to provide services in the future to meet the
continually changing demands of customers. The Company has refined its sales and
marketing plan as well as products in order to achieve the desired level of
revenue, which could result in increased sales and marketing costs. In the event
demand for the Company's services does not prove to be as great as anticipated,
revenues may be lower than expected and/or sales and marketing expenses higher
than anticipated, either of which may increase the amount of time and capital
that the Company needs to achieve a profitable level of operations. There is no
assurance that the Company will be successful in marketing the three new
redefined services contemplated. Although management has many years of sales
experience and has conducted an informal market research study with respect to
its business, there is no assurance that the market that the company proposes to
establish will be sufficiently responsive, properly located, and demographically
inclined to the type of operation the Company is intended to operate.

                                       34
<PAGE>

(F)   THE COMPANY COULD FAIL TO DEVELOP NEW PRODUCTS/SERVICES TO COMPETE IN AN
INDUSTRY OF RAPIDLY CHANGING TECHNOLOGY, RESULTING IN DECREASED REVENUES.

      The Company operates in an industry with rapidly changing technology, and
its success will depend on the ability to deploy new products/services that keep
pace with technological advances. The market for communications services is
characterized by rapidly changing technology and evolving industry standards.
The Company's technology or systems may become obsolete upon the introduction of
alternative technologies. If the Company does not develop and introduce new
services in a timely manner, it may lose opportunities to competing service
providers, which would adversely affect business and results of operations.

      There is a risk to the Company that there may be delays in initial
implementation of new services/products. Further risks inherent in new
product/service introductions include the uncertainty of price-performance
relative to products/services of competitors, competitors' responses to its new
product/service introductions, and the desire by customers to evaluate new
products/services for longer periods of time. Also, the Company does not have
any control over the pace of technology development. There is a significant risk
that rights to a technology could be acquired or be developed that is currently
or is subsequently made obsolete by other technological developments. There can
be no assurance that any new technology will be successfully acquired,
developed, or transferred.

(G)   NEW VERSIONS OF THE COMPANY'S SERVICES MAY CONTAIN ERRORS OR DEFECTS,
WHICH COULD AFFECT ITS ABILITY TO COMPETE.

      The Company's services are complex and, accordingly, may contain
undetected errors or failures when first introduced or as new versions are
released. This may result in the loss of, or delay in, market acceptance of its
products. The Company may in the future discover errors and additional
scalability limitations in new releases or new products after the commencement
of commercial shipments or be required to compensate customers for such
limitations or errors, the result of which its business, cash flow, financial
condition and results of operations could be materially adversely affected.

(H)   THE COMPANY'S ABILITY TO GROW IS DIRECTLY TIED TO ITS ABILITY TO ATTRACT
AND RETAIN CUSTOMERS, WHICH COULD RESULT IN REDUCED REVENUES.

      The Company has no way of predicting whether its marketing efforts will be
successful in attracting new customers and acquiring substantial market share.
If the Company's marketing efforts fail, it may fail to attract new customers,
which would adversely affect business and financial results.

                                       35
<PAGE>

(I)   DISRUPTIONS IN OR INTERFERENCE WITH INTERNATIONAL TRAVEL COULD AFFECT THE
COMPANY'S BUSINESS.

      The Company's core competency relates to providing interpreter and
concierge services and telephony services to international travelers. Therefore,
any disruption or limitation on international travel could have an adverse
effect on our business and revenues. Virtually all such disruptions arise from
events beyond the Company's control, such as terrorist acts which cause
governments to limit international travel, higher fuel costs which make the
costs of travel too expensive, travel restrictions, imposed because of an
epidemic or pandemic, such as bird flu, or economic downturns that make fewer
funds available for leisure travel. Furthermore, the Company does not have
alternate revenue sources to substitute for any such disruption or limitation.

(J)   THE COMPANY'S SUCCESS IS LARGELY DEPENDENT ON THE ABILITIES OF ITS
MANAGEMENT.

      The Company's success is largely dependent on the personal efforts and
abilities of its senior management, none of which currently has an employment
agreement with the Company. The loss of certain members of the Company's senior
management, including its chief executive officer, could have a material adverse
effect on its business and prospects.

      The Company intends to recruit in fiscal year 2007 employees who are
skilled in its industry. The failure to recruit these key personnel could have a
material adverse effect on the Company's business. As a result, the Company may
experience increased compensation costs that may not be offset through either
improved productivity or higher revenue. There can be no assurances that the
Company will be successful in retaining existing personnel or in attracting and
recruiting experienced qualified personnel.

(K)   ANY REQUIRED EXPENDITURES AS A RESULT OF INDEMNIFICATION WILL RESULT IN AN
INCREASE IN THE COMPANY'S EXPENSES.

      The Company's articles of incorporation and bylaws include provisions to
the effect that the Company may indemnify any director, officer, or employee. In
addition, provisions of Nevada law provide for such indemnification, as well as
for a limitation of liability of the Company's directors and officers for
monetary damages arising from a breach of their fiduciary duties. Any limitation
on the liability of any director or officer, or indemnification of any director,
officer, or employee, could result in substantial expenditures being made by the
Company in covering any liability of such persons or in indemnifying them.


                                       36
<PAGE>

OPERATING ACTIVITIES.

      Net cash used in operating activities was $352,339 for the six months
ended June 30, 2007 compared to $499,176 for the six months ended June 30, 2006,
a change of $146,837 or approximately 29%. The primary reason for the change was
increase in the use of stock to pay some of our vendors in the six months ending
June 30, 2007. Because the Company could pay for services with stock, it was
able to reduce the actual cash it had to spend on operating activities.

      Net cash used in operating activities was $3,020,587 for the period from
September 2, 2002 (inception) through June 30, 2007.

INVESTING ACTIVITIES.

      Net cash used in investing activities was $3,804 for the six months ended
June 30, 2007 compared to $5,454 for the six months ended June 30, 2006. Net
cash used in investing activities was $538,103 for the period from September 2,
2002 (inception) through June 30, 2007. The Company has reduced spending on
asset purchases unless such purchases are absolutely necessary in order to
reduce the amount cash the Company is spending.

LIQUIDITY AND CAPITAL RESOURCES.

      As of June 30, 2007, the Company had total current assets of $7,083 and
total current liabilities of $1,281,973, resulting in a working capital deficit
of $1,274,890. At June 30, 2007, the Company's current assets consisted solely
cash on hand. As a development stage company that began operations in 2002, the
Company has incurred $7,328,363 in cumulative total losses from inception
through June 30, 2007.

      The above factors raise substantial doubt as to the Company's ability to
continue as a going concern. The Company's independent registered public
accounting firm's audit report included in the Company's Form 10-KSB included
explanatory paragraphs regarding the Company's ability to continue as a going
concern.

      The accompanying consolidated financial statements have been prepared
assuming that the Company continues as a going concern and contemplates the
realization of assets and the satisfaction of liabilities in the normal course
of business. The ability of the Company to continue as a going concern on a
long-term basis will be dependent upon its ability to generate sufficient cash
flows from operations to meet its obligations on a timely basis, to obtain
additional financing and to ultimately attain profitability.

      The Company's current cash flow from operations will not be sufficient to
maintain its capital requirements for the year. Therefore, the Company's
continued operations, as well as the implementation of its business plan, will
depend upon its ability to raise additional funds through bank borrowings and
equity or debt financing of up to $2,000,000 during the year ending December 31,
2007.

                                       37
<PAGE>

      The Company has been successful in obtaining the required cash resources
by issuing stock and notes payable, including related party notes payable, to
service the Company's operations through the first quarter of 2007. Net cash
provided by financing activities was $354,516 for the six months ended June 30,
2007 compared to $492,972 for the six months ended June 30,2007, a change of
$138,456 or approximately 28%. This decrease was primarily the result of not
selling as much stock for cash and instead relying on the ability to borrow
money from lenders. Net cash used in financing activities was $3,575,773 for the
period from September 2, 2002 (inception) through June 30, 2007.

      The Company has continued to issue stock to various vendors to make
payments for services rendered. In the six months ending June 30, 2007, the
Company issued 1,897,000 shares of stock in payment of services valued at
$367,580. The Company also granted some stock options for services valued at
$81,130. Of the 1,897,000 shares issued by the Company, 1,832,000 shares were
issued to vendors with a promise that the shares would cover a certain amount of
money owed to that vendor. If the vendor is unable to sell its shares to cover
the promised amount, the Company will be liable to issue more shares for the
amount that the vendor was unable to recover through the sale of stock. Through
June 30, 2007 594,500 shares had yet to be sold by the vendors that received
them. If the Company's stock price were to fall from the price the shares were
originally issued at, the Company will have to issue more stock to cover the
change in the stock price. As of June 30, 2007, the Company's stock price has
fallen from the original issue price making the company liable for issuing an
additional $87,000 shares of stock. The amount of this liability has not been
reflected on the Company's financial statements as the true amount of the
liability is not yet known as it is dependent on the vendors decision to sell
their stock.

      Whereas the Company has been successful in the past in raising capital, no
assurance can be given that sources of financing will continue to be available
and/or that demand for its equity/debt instruments will be sufficient to meet
its capital needs, or that financing will be available on terms favorable to the
Company. The consolidated financial statements do not include any adjustments
relating to the recoverability and classification of assets and liabilities that
might be necessary should the Company be unable to continue as a going concern.

      If funding is insufficient at any time in the future, the Company may not
be able to take advantage of business opportunities or respond to competitive
pressures or may be required to reduce the scope of the Company's planned
product development and marketing efforts, any of which could have a negative
impact on business and operating results. In addition, insufficient funding may
have a material adverse effect on the Company's financial condition, which could
require the Company to:

o     curtail operations significantly;

o     sell significant assets;

o     seek arrangements with strategic partners or other parties that may
      require the Company to relinquish significant rights to products,
      technologies or markets; or

                                       38
<PAGE>

o     explore other strategic alternatives including a merger or sale of the
      Company.

      To the extent that the Company raises additional capital through the sale
of equity or convertible debt securities, dilution of the interests of existing
stockholders may occur. If additional funds are raised through the issuance of
debt securities, these securities may have rights, preferences and privileges
senior to holders of common stock and the terms of such debt could impose
restrictions on the Company's operations. Regardless of whether the Company's
assets prove to be inadequate to meet its operational needs, the Company may
seek to compensate providers of services by issuance of stock in lieu of cash,
which may also result in dilution to existing stockholders.

CONTRACTUAL OBLIGATIONS.

(A)   CAPITAL LEASE.

      The Company leases certain computers under agreements that are classified
as capital leases. The cost of equipment under capital leases is included in the
balance sheets as furniture and equipment and amounted to $31,095 at March 31,
2007. Accumulated amortization of the leased equipment at March 31, 2007 was
$12,317. Amortization of assets under capital leases is included in depreciation
expense.

(B)   OPERATING LEASES.

      The principal executive offices for the Company currently consist of
approximately 1,000 square feet of office space (some of which is shared use),
which are located at 4640 Admiralty Way, Suite 500. Marina del Rey, California
90292. The Company leases this property on a month-to-month basis at the current
monthly rent of $2,500 as of June 30, 2007.

(C)   INDEMNITIES AND GUARANTEES.

      During the normal course of business, the Company has made certain
indemnities and guarantees under which it may be required to make payments in
relation to certain transactions. These indemnities include certain agreements
with the Company's officers under which the Company may be required to indemnify
such persons for liabilities arising out of their employment relationship, lease
agreements. The duration of these indemnities and guarantees varies, and in
certain cases, is indefinite.

OFF BALANCE SHEET ARRANGEMENTS.

      Other than operating leases, the Company does not engage in any off
balance sheet arrangements that are reasonably likely to have a current or
future effect on its financial condition, revenues, results of operations,
liquidity or capital expenditures.

                                       39
<PAGE>

INFLATION.

      The impact of inflation on the costs of the Company and the ability to
pass on cost increases to its customers over time is dependent upon market
conditions. The Company is not aware of any inflationary pressures that have had
any significant impact on the Company's operations over the past year and the
Company does not anticipate that inflationary factors will have a significant
impact on future operations.

CRITICAL ACCOUNTING POLICIES.

      The SEC has issued Financial Reporting Release No. 60, "Cautionary Advice
Regarding Disclosure About Critical Accounting Policies" ("FRR 60"), suggesting
companies provide additional disclosure and commentary on their most critical
accounting policies. In FRR 60, the SEC has defined the most critical accounting
policies as the ones that are most important to the portrayal of a company's
financial condition and operating results and require management to make its
most difficult and subjective judgments, often as a result of the need to make
estimates of matters that are inherently uncertain. Based on this definition,
the Company's most critical accounting policies include: (a) valuation of
stock-based compensation arrangements; (b) revenue recognition; and (c)
derivative liabilities. The methods, estimates and judgments the Company uses in
applying these most critical accounting policies have a significant impact on
the results the Company reports in its consolidated financial statements.

(A)   VALUATION OF STOCK-BASED COMPENSATION ARRANGEMENTS.

      The Company has issued, and intends to continue to issue, shares of common
stock and options to purchase shares of its common stock to various individuals
and entities for management, legal, consulting and marketing services. The
Company adopted SFAS No. 123 (Revised 2004), "Share Based Payment" ("SFAS No.
123R"). SFAS No. 123R requires companies to measure and recognize the cost of
employee services received in exchange for an award of equity instruments based
on the grant-date fair value. SFAS No. 123R eliminates the ability to account
for the award of these instruments under the intrinsic value method prescribed
by Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock
Issued to Employees," and allowed under the original provisions of SFAS No. 123.
These transactions are reflected as a component of selling, general and
administrative expenses in the accompanying statement of operations.

(B)   REVENUE RECOGNITION.

      The Company recognizes revenues: (i) for the wholesale product sold by the
Company to international wireless providers, when its proprietary software
confirms that the user of its services has been billed by the international
wireless providers; (ii) for the "Travel Kit" distributed through strategic
travel industry related distribution channels; and (iii) for the sale of the SIM
cards to retailers, when the credit card of the user has been debited for usage
or for access to Company provided interpretation and/or assistance services.

(C)   DERIVATIVE LIABILITIES.

      During the year ended December 31, 2006, the Company issued warrants and
options to numerous consultants and investors for services and to raise capital.
During the period up until the recapitalization performed on December 1, 2006
(Note 1), the Company did not have sufficient authorized shares in order to
issue these options should they be exercised. Because of the lack of authorized
shares, the Company therefore needed to follow derivative accounting rules for
its accounting of options and warrants.

                                       40
<PAGE>

      The Company evaluates the conversion feature of options and warrant
indexed to its common stock to properly classify such instruments within equity
or as liabilities in its financial statements, pursuant to the requirements of
the EITF No. 00-19, "Accounting for Derivative Financial Instruments Indexed to,
and Potentially Settled in, a Company's Own Stock," EITF No. 01-06, "The Meaning
of Indexed to a Company's Own Stock," and SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities," as amended.

      Pursuant to EITF 00-19, the Company was to recognize a liability for
derivative instruments on the balance sheet to reflect the insufficient amounts
of shares authorized, which would have otherwise been classified into equity. An
evaluation of specifically identified conditions was then made to determine
whether the fair value of warrants or options issued was required to be
classified as a derivative liability. The fair value of warrants and options
classified as derivative liabilities was adjusted for changes in fair value at
each reporting period, and the corresponding non-cash gain or loss was recorded
in the corresponding period earnings.

      In December 2006, the Company completed a reincorporation by merger with
Texxon-Nevada, which, therefore, allowed the Company to increase its authorized
preferred and common shares from 5,000,000 to 10,000,000 shares and from
45,000,000 to 100,000,000 shares, respectively.

      At the date of recapitalization, the Company recalculated the value of its
options and warrants at the current fair value, and recorded an increase to
equity and a decrease to derivative liabilities for the fair value of the
options and warrants. The difference between the liability and the recalculated
fair value was recorded as a gain or loss.

FORWARD LOOKING STATEMENTS.

      Information in this Form 10-QSB contains "forward looking statements"
within the meaning of Rule 175 of the Securities Act of 1933, as amended, and
Rule 3b-6 of the Securities Exchange Act of 1934, as amended. When used in this
Form 10-KSB, the words "expects," "anticipates," "believes," "plans," "will" and
similar expressions are intended to identify forward-looking statements. These
are statements that relate to future periods and include, but are not limited
to, statements regarding adequacy of cash, expectations regarding net losses and
cash flow, statements regarding growth, need for future financing, dependence on
personnel and operating expenses.

      Forward-looking statements are subject to certain risks and uncertainties
that could cause actual results to differ materially from those projected. These
risks and uncertainties include, but are not limited to, those discussed below,
as well as risks related to the Company's ability to obtain future financing and
the risks set forth above under "Factors That May Affect Operating Results."
These forward-looking statements speak only as of the date hereof. The Company
expressly disclaims any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements contained herein to
reflect any change in its expectations with regard thereto or any change in
events, conditions or circumstances on which any such statement is based.

                                       41
<PAGE>

ITEM 3.  CONTROLS AND PROCEDURES.

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.

      The Company maintains disclosure controls and procedures (as defined in
Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as
amended) that are designed to ensure that information required to be disclosed
in the Company's periodic reports filed under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
SEC's rules and forms, and that such information is accumulated and communicated
to management, including the Company's principal executive officer and principal
financial officer, to allow timely decisions regarding required disclosures.

      As of the end of the period covered by this report, management carried out
an evaluation, under the supervision and with the participation of the Company's
principal executive officer and principal financial officer, of the Company's
disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule
15d-15(e) of the Exchange Act). Based upon the evaluation, the Company's
principal executive officer and principal financial officer concluded that its
disclosure controls and procedures were effective at a reasonable assurance
level to ensure that information required to be disclosed by the Company in the
reports that it files or submits under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the SEC's rules
and forms. In addition, the Company's principal executive officer and principal
financial officer concluded that its disclosure controls and procedures were
effective at a reasonable assurance level to ensure that information required to
be disclosed by the Company in the reports that it files or submits under the
Exchange Act is accumulated and communicated to the Company's management,
including its principal executive officer and principal financial officer, to
allow timely decisions regarding required disclosure.

      Because of the inherent limitations in all internal control systems, no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, will be or have been detected. These inherent
limitations include the realities that judgments in decision-making can be
faulty and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some
persons, by collusion of two or more people and/or by management override of
controls. The design of any system of controls also is based in part upon
certain assumptions about the likelihood of future events, and there can be no
assurance that any design will succeed in achieving its stated goals under all
potential future conditions. Over time, controls may become inadequate because
of changes in conditions, and/or the degree of compliance with the policies and
procedures may deteriorate. Because of the inherent limitations in a
cost-effective internal control system, misstatements due to error or fraud may
occur and not be detected.

CHANGES IN DISCLOSURE CONTROLS AND PROCEDURES.

      There were no changes in the Company's disclosure controls and procedures,
or in factors that could significantly affect those controls and procedures,
since its most recent evaluation.

                                       42
<PAGE>

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

      None.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

      There were no unregistered sales of the Company's equity securities during
the three months ended on June 30, 2007 that have not previously been reported.
There were no purchases of the Company's common stock by the Company's
affiliates or by it during the three months ended June 30, 2007.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

      As of June 30, 2007, the Company was in default in the payment of $295,139
in principal amount of various notes payable (related and non-related parties,
as discussed in Notes 9 and 11 to the financial statements, but excluding the
note payable to First Bridge Capital) and in the payment of $96,458 of accrued
interest. The Company is in the process of negotiating settlements or payments.
All notes are included in current liabilities. The Company is negotiating with
the lenders to secure a conversion of the debt to a proposed series of
convertible preferred stock; pending the resolution of this matter, the lenders
are exercising forbearance.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

      None.

ITEM 5.  OTHER INFORMATION.

SUBSEQUENT EVENTS.

      During the period from July 1, 2007 through August 8, 2007, the Company
issued a total of 739,000 free trading shares of common stock out of its 2007
Stock and Option Plan to consultants for services rendered to the Company. These
shares were valued at a total of $36,950 ($0.05per share).

ITEM 6.  EXHIBITS.

      Exhibits included or incorporated by reference in this document are set
forth in the Exhibit Index.

                                       43
<PAGE>

                                   SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                             CONTINAN COMMUNICATIONS, INC.


Dated: August 12, 2007                       /s/ Claude C. Buchert
                                             ---------------------
                                             Claude C. Buchert,
                                             Chief Executive Officer


Dated: August 12, 2007                       /s/ Helene Legendre
                                             -------------------
                                             Helene Legendre,
                                             Chief Financial Officer


                                       44
<PAGE>

                                  EXHIBIT INDEX

Number                              Description
------                              -----------

3.1       Articles of Incorporation, dated March 13, 2006 (incorporated by
          reference to Exhibit 3.1 of the Form 10-KSB filed on May 9, 2007).

3.2       Articles of Merger, dated November 22, 2006 (incorporated by reference
          to Exhibit 99.1 of the Form 8-K filed on December 7, 2006).

3.3       By-Laws, dated October 6, 1998 (incorporated by reference to Exhibit
          3.2 of the Form 10-SB filed on February 28, 2002).

4.1       1998 Incentive Stock Option Plan, dated November 1, 1998 (incorporated
          by reference to Exhibit 10.1 of the Form 10-SB filed on February 28,
          2002)

4.2       2002 Non-Qualified Stock Option Plan, dated October 1, 2002
          (incorporated by reference to Exhibit 4 of the Form S-8 filed on
          January 27, 2003)

4.3       Share Exchange Agreement between the Texxon, Inc., TelePlus, Inc., and
          the Shareholders of TelePlus, Inc., dated March 2, 2006 (incorporated
          by reference to Exhibit 2 of the Form 10-QSB filed on May 22, 2006).

4.4       Certificate of Designation of TelePlus Acquisition Series of Preferred
          Stock, dated May 8, 2006 (incorporated by reference to Exhibit 4.1 of
          the Form 8-K filed on June 7, 2006).

10.1      Employment Agreement between TelePlus, Inc. and Claude Buchert, dated
          January 1, 2004 (incorporated by reference to Exhibit 10.1 of the Form
          10-KSB filed on May 9, 2007).

10.2      Employment Agreement between TelePlus, Inc. and Helene Legendre, dated
          January 1, 2004 (incorporated by reference to Exhibit 10.2 of the Form
          10-KSB filed on May 9, 2007).

10.3      Addendum to Employment Agreement between TelePlus, Inc. and Claude
          Buchert, dated February 1, 2004 (incorporated by reference to Exhibit
          10.3 of the Form 10-KSB filed on May 9, 2007).

10.4      Letter of Engagement between TelePlus, Inc. and Ross Nordin, dated
          April 18, 2006 (incorporated by reference to Exhibit 10.4 of the Form
          10-KSB filed on May 9, 2007).

10.5      Settlement Agreement between Wall Street PR, Inc. and Texxon, Inc.,
          dated July 26, 2006 (incorporated by reference to Exhibit 10.5 of the
          Form 10-KSB filed on May 9, 2007).

10.6      Agreement for VOIP Services between TelePlus Inc. and Digitrad France
          SARL, dated July 27, 2006 (incorporated by reference to Exhibit 99 of
          the Form 8-K filed on August 14, 2006).

10.7      Funding Agreement between Texxon, Inc. and First Bridge Capital, Inc.,
          dated August 14, 2006 (incorporated by reference to Exhibit 10.7 of
          the Form 10-KSB filed on May 9, 2007).

10.8      Settlement Agreement between Continan Communications, Inc., First
          Bridge Capital, Inc., and Wall Street PR, Inc., dated December 28,
          2006 (incorporated by reference to Exhibit 10.8 of the Form 10-KSB
          filed on May 9, 2007).

21        Subsidiaries of the Company (incorporated by reference to Exhibit 21
          of the Form 10-KSB filed on May 9, 2007).

31.1      Rule 13a-14(a)/15d-14(a) Certification of Claude C. Buchert (filed
          herewith).

31.2      Rule 13a-14(a)/15d-14(a) Certification of Helene Legendre (filed
          herewith).

32        Section 1350 Certification of Claude C. Buchert and Helene Legendre
          (filed herewith).

99        Provisional Patent Application, dated September 20, 2004 (incorporated
          by reference to Exhibit 99 of the Form 10-KSB filed on May 9, 2007).

                                       45